Brian Ruder of Permira: AI is rewriting the rules of private equity

Permira co-founder and co-CEO Brian Ruder came to Bloomberg Open Interest with a thesis that diverges from market panic: the current volatility is not a threat, but a window of opportunity. Especially if you understand how AI has rewritten the rules of valuing tech assets over the past two years.

Volatility as a Moment for Entry

When public markets are turbulent, private capital finds itself in a structural advantage. Permira — one of Europe's largest PE funds with a history of buyout deals in technology, consumer, and healthcare sectors — traditionally uses periods of turbulence to enter assets that would cost significantly more in a stable market. According to Ruder, current discounts reflect not the real operational state of businesses, but short-term investor fear. This is the classic gap between price and value — exactly what long-term PE returns are built on. Funds with undeployed capital ("dry powder") can now lock in entry points with attractive multiples — a rare situation for the saturated market of recent years.

How AI Crashed SaaS Valuations

Just three or four years ago SaaS companies traded at 20–40x revenue. AI flipped this logic: when a task that once required an expensive vertical SaaS can be solved by a universal LLM — the value of a niche product plummets. This affected entire categories of companies. Ruder points to segments hit hardest:

• Narrow-focus SaaS with simple functionality — transcription, basic analytics, template-based reporting
• Products without proprietary data, built purely as API wrappers
• Companies with low switching costs for customers
• Businesses without proprietary datasets and network effects

For PE funds this radically changes due diligence: the question "how AI-threatened is this product?" now ranks equally with unit economics and churn rate. A high multiple for SaaS without a clear moat — a red flag.

Why Incumbents Are Winning

Ruder's key argument: in the AI era, structural advantage belongs not to startup challengers, but to large established players. The reason is simple — they have something that cannot be bought with venture money and built from scratch in 18 months.

"In the AI race, those with data, distribution, and customer trust win," — the essence of

Ruder's argument from the interview.

Large corporations possess proprietary datasets accumulated over years, entrenched relationships with enterprise clients, and the ability to embed AI into already-functioning products. Startups must compete from zero in an environment where base models are accessible to everyone, and differentiating becomes harder each quarter. For Permira this translates to a concrete focus: mature tech companies with dominant positions in their niches — those who use AI as a growth lever, not as an existential threat.

What This Means

Private capital is adapting to the AI era quickly and pragmatically. PE funds are revising valuation models, betting on incumbents with accumulated data, and becoming increasingly cautious about young SaaS products without a clear moat. Market volatility, meanwhile, is not a reason to pause, but a tool for those with a strategy and capital.