3 hours ago
Featured image by Jenna O'Malley/PitchBook News
Private equity firms have raced to embed AI into portfolio companies, betting it will reshape businesses and boost valuations, yet few have results to show for it.
A round of conversations with advisers provided a reality check on the hype, laying bare the distance between what the PE industry is hankering for from AI and what its experiments have delivered so far. While most firms have been tinkering enthusiastically, many haven't done it in a way that has translated into financial gains.
The mainstream effort is aimed at automating unglamorous back-office work—coding invoices, generating reports, managing contracts and procurement—at this point, rarely is AI used to fuel growth.
"AI is an efficiency play, for sure," said Anil **** ar, a managing director at Alvarez & Marsal who develops and deploys the firm's generative AI tool suite for PE firms. The bigger value lies in using AI to improve revenue, generate more revenue streams and stay competitive, he said.
Private equity firms have raced to embed AI into portfolio companies, betting it will reshape businesses and boost valuations, yet few have results to show for it.
A round of conversations with advisers provided a reality check on the hype, laying bare the distance between what the PE industry is hankering for from AI and what its experiments have delivered so far. While most firms have been tinkering enthusiastically, many haven't done it in a way that has translated into financial gains.
The mainstream effort is aimed at automating unglamorous back-office work—coding invoices, generating reports, managing contracts and procurement—at this point, rarely is AI used to fuel growth.
"AI is an efficiency play, for sure," said Anil **** ar, a managing director at Alvarez & Marsal who develops and deploys the firm's generative AI tool suite for PE firms. The bigger value lies in using AI to improve revenue, generate more revenue streams and stay competitive, he said.
