Rich Friedman on the Rise of Private Markets and AI Investing
Episode publishedPodcast: Goldman Sachs ExchangesGoldman Sachs Exchanges
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I never imagined the PE industry would evolve into what it is. This is industrialized. There are hundreds and hundreds of them. Thousands. Thousands. So, you know, the crisis today in the PE industry is exits. It's not operating performance. Everything's slowed. Yep. Let's put it that way. But it's an incredible business to be able to go search, find, and then manage and create. And the question is, is that still doable in in in the world? And my answer would be, yeah.
Welcome to Goldman Sachs Exchange's great investors. Today, I sit down with Rich Friedman, the chairman of Goldman Sachs Asset Management and one of the foremost leaders in alternative investing. Welcome to Great Investors, Rich. It's so great to have you here.
Thanks, Allison. This is really a treat for me.
So today, I'm interviewing you for Great Investors Podcast. But before we begin that and talk about the investment environment, I want to go back to your start at Goldman Sachs, which is forty five years ago. Tell us about your first day. What was that like? Do you remember?
You know, I do remember. I remember we were at 55 Broad Street. Most people think we were at 85 Broad Street, but, you know, I'm dating myself, but I would think I was on the 8th Floor. And it was a small area, and there were about 25 to 30 people in the group. And the funny thing is, one of the people I saw as I was walking in was this guy named Joel Beckman. He was someone I grew up with in Riverdale. It was a very low key, very welcoming place, and I didn't feel, you know, so anxious walking in there, because I knew someone, and it seemed like a, you know, a place you could sort of assimila
So what was it like to work at the firm in the 80s? What was that first, ten years like?
Well, varied a lot over ten years, but certainly the early years. Well, of all, the day I joined the firm, Salmon Brothers was sold to Fibro. Wow. Now, I didn't say wow because I didn't really know that much about Goldman Sachs or Salmon Brothers, but it was a little bit of a wow that literally, you you're joining Goldman Sachs and then you hear that one of its principal competitors were sold, and I think it was sold for like $800,000,000 It sounded like a lot of money back then, but obviously not so much, you know, today. But, you know, I'd say that we I got going relatively quickly. The the
And you eventually got your Battlefield promotion, as you call it. Tell us about that story.
So the Battlefield promotion was something because, this was in the middle of a you know, the first recession that I was sort of that we were living through, which was in 1989, 1990. And it was it felt it felt pretty severe at the time. And this is from the SNL crisis that really, caused this. And I had become partner in 1990, and I was slated to raise a new buyout fund. And then I met this individual named Hank Paulson, who became my new mentor, who they said, This is who you're going to report to. Because at that point, we were all in investment banking. There was no concept of a merchant ba
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