Harnessing Generative AI in Private Equity

Generative AI is proving to be a game-changer across industries, and private equity is no exception. According to Bain & Company’s 2024 Global Private Equity Report, investors are already leveraging these technologies to transform companies, sharpen due diligence, and boost returns. Here’s how:

1. Portfolio Management:
   • Investors are using AI to identify impacts and opportunities, linking initiatives to strategic goals for measurable improvements.
   • Example: CVC’s integration of AI in Multiversity Group enhanced educational services, automating routine inquiries and improving efficiency.
2. Due Diligence:
   • AI tools are speeding up and refining the underwriting process, enabling rapid prototype testing to assess potential disruptions.
   • Example: AI evaluation of an IT services company revealed significant efficiency improvements, reinforcing investment confidence.
3. Firm-Level Operations:
   • AI is streamlining back-office functions and expanding the scope of information for better investment decisions.
   • Example: AI-driven deal sourcing reduced evaluation time, making investment professionals more productive and insightful.

Key Takeaways:

• Focused AI initiatives targeted at specific roles or processes can drive significant value.
• Change management is crucial for successful AI integration—clear plans and employee engagement are essential.
• Continuous learning and adaptation are key to staying competitive and improving returns.

Generative AI presents both challenges and opportunities. Early adoption and strategic focus can turn these disruptive technologies to your advantage.

‍

Sources

https://www.bain.com/insights/harnessing-generative-ai-global-private-equity-report-2024/

‍

‍