Sep 7, 2026 · 57 min
Listen from 15:19
Listen at 15:19
American Securities bets on focus as private equity scales
E426: American Securities CEO on Warren Buffett, Private Equity & Playing the Long Game
Michael Fisch offers a case study in building a large private equity firm without abandoning its core strategy, relationships, or long-term horizon.
- 1American Securities grew from a $71 million first fund to $23 billion in assets through disciplined expansion.
- 2Fisch argues that rigorous, triangulated hiring and durable relationships matter as much as investment judgment.
- 3Staying focused, showing up personally, and remaining in business long enough allow compounding to work.
Don't miss
Fisch recalls flying to China for a 45-minute meeting, using the story to illustrate why personal presence can create unexpected long-term value.
The brief
Michael Fisch traces American Securities from a $71 million first fund to $23 billion in assets, explaining how early investment math and experience shaped the firm.
The firm’s growth depended on hiring team players through interviews, testing, references, and future-colleague assessments, then retaining partners for decades.
Fisch explains why American Securities stayed in core private equity rather than chasing adjacent strategies, accepting that specialization naturally limits how quickly it can scale.
As the firm became a 150-person institution, long-tenured colleagues, management alignment, and cultural fit remained central to supporting portfolio companies and choosing CEOs.
His closing principle is personal and practical: make the call, show up in person, avoid distractions, and stay in the game long enough for compounding to work.
What was said on this episode
28 statements · 19 positive · 5 negative · 4 neutral
Global institutional private equity was under $1 billion in 1983.
“The entire global institutional private equity market in 1983 was less than a billion dollars.”
Listen at 3:30
Private equity experienced too much money chasing too few deals by the late 1980s.
“And then it just grew. And there were probably, the first time I heard TFD too much money chasing, see TFD, too much money chasing too few deals was in the late 80s.”
Listen at 3:44
Private equity now comprises multiple trillions and thousands of firms.
“And, of course, now it's multiple trillions and there's thousands of private equity firms.”
Listen at 3:59
Mortgage financing provides an easy analogy for leveraged buyouts.
“The metaphor to mortgage is a very easy way to understand private equity leveraged buyouts.”
Listen at 6:39
Investing with established work partners likely has better odds than investing with casual acquaintances.
“If you're an investor, it might work out, but the odds are probably not as good as if you've worked together and had lots of fun together and kept working together.”
Listen at 8:34
Private equity firms operate, in a sense, within a commodity business.
“Money is the ultimate commodity, so all private equity firms, in a sense, are in a commodity business.”
Listen at 9:13
Private equity is fundamentally a people business.
“But we're really in the people business.”
Listen at 9:19
Job selection should prioritize liking the work and the people.
“the two most important things that i've always used in job selection Do you like the work and do you like the people?”
Listen at 11:51
High pay does not compensate for disliking daily work.
“If you don't like the work every day, it doesn't matter how much they pay you.”
Listen at 12:02
More perspectives improve understanding of a problem.
“The more triangulation you can have, the more perspectives on a problem, the more likely you are to understand it more fully, see it better than you otherwise would.”
Listen at 16:43
More information generally produces a fuller, more accurate perspective.
“The more information you have, the more fulsome and likely accurate your perspective will be.”
Listen at 18:53
Hiring assessments should use multiple expert evaluators and third-party checks.
“A broad array of people who are going to work with the person and should have expertise in what that person is going to be doing to assess their capabilities and some sort of third-party interviewing, testing, metrics, and reference checking.”
Listen at 19:06
Prior success in the same role is the best hiring success indicator.
“the best indicator of success in the job you're hiring for is someone who's done that job and done it well somewhere else”
Listen at 20:06
American Securities should have an advantage evaluating U.S. industrial companies.
“we've been investing in industrial u.s industrial businesses and industrial and service related industrial companies in the u.s for years and that's what we do so we should have an advantage looking at those companies”
Listen at 20:41
Charlie Munger and Warren Buffett stayed within their investment sweet spot.
“Charlie Munger and Warren Buffett, they always knew what their sweet spot was and they didn't go out of it because they didn't have to.”
Listen at 21:00
Warren Buffett evolves as a lifelong learner.
“He does evolve, and he's a lifelong learner, as was Charlie Munger.”
Listen at 21:36
Warren Buffett expanded his investment scope while retaining core principles.
“So his box did expand over time, and he was able to apply the same principles to some companies that you would never thought he would invest in initially.”
Listen at 21:40
Warren Buffett shifted toward global businesses as his capital grew.
“He kept having more and more money. And so to put that money to work and have it matter. He was investing really in global businesses.”
Listen at 22:50
Investors lacking strong deal flow may invest in the best average opportunities.
“if they don't see the great deals, they're going to invest in the best of the average deals.”
Listen at 24:08
Investors should maintain active deal flow and a clear investment screen.
“I think it's really important for everyone who wants to be an investor, whether it's public markets, private markets. whatever you're investing in, to have an active funnel, to see the best deals and then have a very clear screen”
Listen at 24:13
American Securities remains humble about its capabilities and investment edge.
“we have always been, in a sense, super humble about what we know and what we're good at and where we think our right to win is”
Listen at 24:36
American Securities should leave fundamental venture startups to more advantaged investors.
“that fundamental VC startup, there should be someone else who has advantages there”
Listen at 25:21
American Securities prioritized risk-adjusted returns over fund size.
“we didn't care about size we cared about having good returns risk adjusted”
Listen at 30:20
Buying at 7.5 times earnings was superior to paying 9.5 times.
“that meant buying it for seven and a half was a complete winner versus paying nine and a half”
Listen at 30:24
American Securities has remained focused on core private equity funds.
“we have always been uniquely focused on our core private equity funds.”
Listen at 31:53
Private equity can grow only slowly because deal sizes and capable personnel are limited.
“The private equity business can only grow so fast because you can only do deals of such a size, and there's only so many people who can do them, and it's just limited.”
Listen at 34:09
Private credit has a much larger supply of deployable debt than private equity.
“Whereas in private credit or debt, there's infinite amounts of debt out there in the world.”
Listen at 34:18
Private equity cannot grow as quickly as private debt.
“Like it just can't grow as fast as debt can.”
Listen at 34:56
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
