AGM Unscripted: Goldman Sachs' Michael Bruun - Driving Value in Private Equity Through Network and Innovation

What It Covers

Michael Bruun, global co-head of private equity at Goldman Sachs Asset Management, explains how the firm leverages its network and value creation resources across an $83 billion platform. He discusses the shift from financial engineering to operational excellence, the critical role of AI implementation, and how Goldman's "One GS" approach activates employees across the firm to drive deal sourcing and portfolio company growth.

Key Questions Answered

• •Return Formation Evolution: Private equity returns shifted dramatically from 2021 to 2022 as cost of debt rose from 7% to 11%, eliminating multiple expansion strategies. Firms now generate returns through EBITDA growth via revenue scaling and margin expansion rather than financial engineering. Recent credit market improvements have reduced debt costs back to 7%, creating more room for equity returns when combined with operational value creation capabilities.
• •AI Value Creation Priority: Data and AI consume more value creation hours than any other initiative across Goldman's portfolio. The diagnostic process evaluates company data quality, tech stack configuration, and AI enablement potential. AI applications now drive both margin expansion through operational efficiency and revenue growth through improved customer experience, with some companies discovering AI solutions for one problem simultaneously solve adjacent business challenges.
• •Network Activation Model: Goldman's "One GS" structure, implemented seven years ago, activates employees far from investment decisions to support deal sourcing and value creation. The firm deploys over 100 people across six value acceleration sectors: revenue scaling, operational excellence, technology, talent, ESG, and finance strategy. Talent, revenue scaling, and technology consume the most implementation hours across the portfolio, with talent upgrades considered essential for future-proofing companies.
• •Strategic Exit Focus: Goldman maintains discipline by underwriting every deal with a strategic buyer or financial sponsor exit in mind, avoiding reliance on continuation vehicles or evergreen funds as primary exit strategies. While evergreen vehicles provide flexibility and quick deployment for investors less familiar with private equity, they represent a small portion of capital and supplement rather than substitute traditional closed-end fund structures to prevent strategy drift.
• •Collaboration Over Solo Dealmaking: The skill set for private equity investors has shifted from singular deal-making ability to orchestrating resources across large teams. Predicting whether a company remains relevant five years out requires collaboration across public and private investment teams, strategic corporate relationships, and engineering resources. Goldman's CEO AI Academy trains portfolio company leaders to drive AI adoption top-down rather than delegating it solely to technology departments.