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Being part of the PE Portfolio Ops ecosystem, the topic of AI inevitably arises one way or another into the conversation. It's interesting to see how quickly it is being integrated, with firms such as Carlyle, Blackstone, Bain Cap, Vista and many more, leveraging AI to drive value creation across their portfolio companies. More recently, Schroders Capital has launched its new AI tool, GAiiA, putting them at the forefront of leveraging AI platforms to elevate private market operations. Consequently, this will shape the future of their PE investments. Broadly, we see this AI shift revolutionizing Value Creation in PE across different areas: - Enhanced Due Diligence: AI tools driving swift and precise data analysis, amplifying the efficiency and depth of due diligence processes. - Operational Improvements: enhancing portfolio company operations by pinpointing inefficiencies and automating tasks effectively. - Strategic Decision-Making: AI analytics can provide valuable market trend insights, facilitating the development of growth strategies and the identification of new opportunities. - Performance Monitoring: AI enables real-time tracking of portfolio company performance, allowing for timely interventions to achieve value creation objectives. - Risk Management: AI offers early risk prediction capabilities, empowering firms to proactively mitigate threats and navigate market fluctuations. - Value Realization: assisting in formulating optimal exit strategies by identifying prime selling times and potential buyers, maximizing returns and streamlining sales preparations. Overall, the incorporation of AI helps PE firms to refine decision-making processes, enhance operational efficiencies, drive greater value within their portfolio companies, and sustain a competitive edge in the market. However, it is crucial to stay mindful of potential challenges and ensure ethical and effective implementation. How do you think AI is transforming Private Equity Portfolio Operations? #PrivateEquity #AI #ValueCreation #DataAnalytics #Innovation

The AI Dilemma: Investing in Potentially Redundant Businesses In the age of AI, there is a pressing question for investors: Does it make sense to buy businesses that might become obsolete with AI? This dilemma is particularly relevant for industries like accounting and tax services. AI is rapidly transforming these sectors: - Automating data entry and analysis - Streamlining compliance processes - Providing real-time financial insights With AI handling many of the routine tasks, are these businesses still a viable investment? To me the answer requires a nuanced approach: 1. Adaptability: Businesses that proactively embrace AI and integrate it into their services are more likely to stay relevant. My tip: Look for companies with a forward-thinking approach. 2. Specialization: Firms that offer specialized, high-value services that require human expertise may be less susceptible to AI disruption. My tip: Niche expertise can be a competitive advantage. 3. Client relationships: Businesses that prioritize building strong, personal relationships with clients may have an edge over purely AI-driven solutions. My tip: Focus on relationships and personalized service. 4. Hybrid models: Companies that successfully blend AI efficiency with human insight and judgment could be well-positioned for the future. The key is finding the right balance. 5. Long-term outlook: While AI may automate certain aspects of these businesses, the demand for financial and tax services is unlikely to disappear entirely. Consider the long-term prospects of the industry. When evaluating potential deal targets, it's crucial to assess how well the business is preparing for the AI-driven future: - Are they investing in AI technologies? - Are they upskilling their workforce? - Are they adapting their business model? Businesses that are proactively navigating the AI landscape may still present attractive investment opportunities. However, investors should approach with caution and conduct thorough due diligence. The AI revolution is not about replacing humans but rather augmenting their capabilities. Businesses that can harness the power of AI while leveraging human strengths will be the ones to thrive. As an investor, I believe the key is to identify those companies that are not just surviving but thriving in the age of AI. What do you think?

According to Schroders, 70% advisors are open to embracing AI, with good reasons: 💌 Hyper-personalised investment advice: AI analyses vast data for tailor-made strategies 📈 Real-time risk management: Stay ahead with AI algorithms that adjust strategies instantly 🚀 Enhanced client journeys: AI empowers advisors to deliver targeted communication & identify upselling opportunities Ready to unlock the power of AI? https://lnkd.in/eZJK6N-f #WealthManagement #ArtificialIntelligence #AI

Recent Schwab Advisor Services survey: 81% of advisors believe more needs to be done to fully take advantage of AI, and 60% think AI is the tech-related industry factor they're least prepared to navigate. Financial Advisor IQ https://lnkd.in/geVZwkMd

#PE_firms could unlock incredible value through AI, the advancements present great opportunity for firms and their assets, keeping in mind the risks. Exploring the unpredictable market and create value requires a blend of short-term solutions and long-term strategies. Leveraging #AI to improve speed and quality of deal process, even in times of integration and holding period. KPMG's approach to AI implementation is designed to enhance both your short-term and long-term operations. Let's make your business more competitive together. Dive deep with KPMG’s latest report on “Private Equity’s next big leap”. #KPMGElevate #KPMGValueCreation #KPMGDeals #AI #Equity #Deal

Yashwin Pamecha discusses the potential of #AI in F&A operations today. #CFOs today are required to be risk managers, investment strategists, and #financialreporting virtuosos, seamlessly blending these multifaceted responsibilities into a singular, cohesive role. #GenAI can analyze vast amounts of data, identify trends, and even generate reports with key insights. But how do businesses integrate this powerful technology into their existing operations? Read Yashwin's #ExpertPOV to find out: https://lnkd.in/dUcSe9vy #GenerativeAI #Innovation #financeandaccounting #FinanceTransformation 

Did you know that 26% of asset managers are currently using generative AI, and 51% plan to do so in the future? Given that the technology is still relatively new, private equity firms are still experimenting with how to use generative AI to improve their businesses and their clients' companies. While some private equity firms are still approaching generative AI cautiously and trying to determine how to use it and if it will be transformative, others are embracing it in a range of ways, including in: ➡️ Regulatory compliance and risk management ➡️ Investor relations and reporting ➡️ Due diligence and data analysis ➡️ Portfolio management and performance tracking ➡️ Deal sourcing and screening ➡️ Portfolio companies. However, as is the case with every industry implementing AI, it’s not without its risks, which is why any private equity firm using AI ought to ensure that it is paired with human supervision and that data and privacy are protected. From the perspective of a private equity firm, we’re excited to see how AI will generate cost savings, drive sales, and increase efficiencies. Read this article to see how AI might impact the private equity industry: https://buff.ly/3UztSVa #PrivateEquity #AI #Businesses #Investment

The use of AI is growing in wealth management contexts, taking on a role of “assistant” to augment the skill and experience of human advisors. It’s a burgeoning technology that promises to deliver incredible results and drive efficiency across the board. 🚀 Now, with the AI Act building room for innovation into its legislation, there’s nothing holding the industry back. Advisors of the future have firmly arrived in the present. WM firms must act to remain ahead of the curve. 🌟 Read the article for more. 👉 https://lnkd.in/dbjYzAsp

I was recently asked if the investors pouring billions into AI also use it themselves to make smarter investment decisions. Turns out, it’s probably not as common as you’d think (yet). There’s huge potential for AI to turbocharge sourcing, enhance market/company diligence, gain portfolio insights, and ultimately support better decision-making for capital allocation. But there are significant roadblocks, including a serious concern about data privacy. Last week, I joined a panel discussion with Tracy Fong (Albourne), Abhishek Rane, FRM (Ascension Investment Management, LLC) and Zhang Zhang (Polen Capital). We explored how investors for both GPs (General Partners) and LPs (Limited Partners) are integrating AI internally. Forward-leaning firms are bringing on or leveraging existing in-house data scientists and AI engineers to amplify existing solutions or even developing proprietary LLMs (large language models). Other firms are taking advantage of the numerous off-the-shelf AI productivity tools for notetaking (Fireflies.ai, Otter.ai), sourcing aids (Deckmatch, Tracxn, Sourcescrub), and market mapping tools (Meticulate (YC W24)). Despite the numerous startups building AI tools for investors, we’re still in the early phases of adoption as data privacy is a huge obstacle. Even as the industry navigates these challenges and opportunities in the short term, I believe AI and data science will undoubtedly play an increasingly crucial role in capital allocation in the long term.

It’s predicted that more than 70% of working hours in the financial services sector can be improved by generative AI. This means greater efficiency, increased productivity, and in turn, more opportunity for growth. Read insights from Dynamo CEO Hank Boughner on the potential AI presents for the alternative investments industry.