Episode summary
Goldman Sachs’ Michael Bruun on AI, Private Equity & The War for Talent
How I Invest With David Weisburd
· · 37 min · Hosts: David Weisburd · Guests: Michael Bruun
Summary
Michael Bruun argues that private equity is being reshaped less by technology itself than by the people who can deploy it. He says Goldman Sachs’ advantage in the middle market comes from its network, its balance-sheet credibility, and more than 110 operating partners who can act as “talent magnets” across portfolio companies. In his view, the most valuable contribution often is not a new system or slide deck, but putting a high-caliber operator “behind” a problem so the work compounds.
He also says higher rates have pushed the industry back to fundamentals: EBITDA growth, cash-flow generation, disciplined underwriting, and stripping out assumptions about cheap financing. Bruun expects assets that are improved operationally and technologically to be more attractive to strategic buyers, especially when diligence reveals messy data, fragmented ERP systems, or weak tech stacks that can be fixed during ownership.
On AI, Bruun’s message is that adoption has to start with the CEO, then be supported by experimentation, leadership changes where needed, and access to the right vendors. He says AI initiatives should be judged by two outcomes: scaling revenue or improving margins. He also thinks the war for talent is intensifying because the best people, paired with AI, can move much faster than before.
Key takeaways
- Bruun says Goldman’s middle-market edge comes from combining its network, balance sheet, and more than 110 operating partners.
- He argues higher rates have forced private equity back to EBITDA and cash-flow growth instead of relying on multiple expansion.
- Bruun says the best AI programs start with the CEO and should target either revenue growth or margin improvement.
- He expects strategic buyers to pay up for companies whose data, tech stack, and operations have been cleaned up during ownership.
- Bruun says the war for talent is becoming more important because AI-enabled employees can move much faster.
- He says continuation vehicles are useful, but Goldman’s direct private equity strategy has mostly exited to strategic buyers with synergies.
Notable quotes
“We have more than 110 operational partners that drive value creation in our strategy”
“giving them talent is what really moves the needle”
“We're kind of going back to basics, going back to you drive value by compounding EBTA and cash flows”
“It all starts with does the CEO of the company have an AI mindset”
How the episode opens
It needs to come from the top. The CEO needs to make it well understood by all employees that AI is an absolute must and it's something that will change the way we do our business and we embrace that change. There needs to be some experimentation.
If humans are not allowed to experiment, it is unlikely that we will get to the most relevant and most creative solution. CEOs are also faced and this might at times be uncomfortable with the task of deciding whether the rest of their XCOM or leadership team is actually ready for this transformation. The war for talent is bigger than it's ever been.
If you can get the right people in with the right change mindset, they can move so much faster because they are AI enabled. Michael, you're the global co-head of private equity at Goldman where you've been for nearly 23 years and when you were earlier on in your Goldman career, you were influenced by Lloyd Blankfine saying about having skin in the game. Why was that so influential for you?
Goldman Sach services its clients in a multitude of ways. It provides advice. It facilitates financings.
It's a very large market maker in multiple markets, stocks, bonds, commodities, and then it's a principal investor. And I think what Lloyd meant when he mentioned skin in the game was that we can be several things for clients and give an even more comprehensive service. So not only provide advice and provide financing also at times put our money where our mouth is and invest alongside clients and that gives a very unique and trusted relationship and it's something that is unique to our firm very few firms can do it and no other firm does it at the scale of Goldman Sachs and for those of us who have read his most recent book street wise you'll see that he specifically refers to this element and some the unique characteristics of Goldman Sachs.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai transformation
- private equity talent advantage
- goldman private equity deals
- higher rates and private equity fundamentals
- ai implementation playbook
Companies and tickers mentioned
- GS
- Goldman Sachs Asset Management
- Advania
- GS Wyvern
- LRQA
- Norgine
- Northvolt
Watch the episode
Watch “Goldman Sachs’ Michael Bruun on AI, Private Equity & The War for Talent” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
