Charting the future of AI

Managers have mixed opinions on which areas of private funds management will most benefit from artificial intelligence technology, according to Private Debt Investor’s latest Private Fund Leaders Survey.

Nearly one-third of GPs identify due diligence and data analysis as the business area in which artificial intelligence will have the greatest impact over the next five years, according to PDI’s Private Fund Leaders Survey 2023.

The survey, which compiled responses from 101 senior buyout, growth, private debt, venture capital, real estate and infrastructure executives globally, found that 32 percent of GPs believe AI will have the biggest impact on processes in this area, followed by portfolio management and performance tracking (20 percent) and investor relations and reporting (18 percent).

The area in which AI adoption has been more popular to date is within portfolio companies, with 14 percent of respondents saying they have implemented AI solutions in their portfolios and a further 31 percent having plans to do so in the next year.

Meanwhile, the area set to receive the highest proportion of AI integration in the near-term is portfolio management and performance tracking, into which 40 percent of GPs say they will look to integrate AI in the next 12 months, in addition to the 6 percent of managers that have already implemented the technology.

Just 6 percent of GPs have already implemented AI into their due diligence and data analysis processes, though this is an area where a further 34 percent of managers say they will be focusing investments over the year.

The survey also suggests that the private funds industry’s interest in AI is unlikely to disappear any time soon, with nearly two-thirds of GPs reporting that they believe AI will be the most significant technology to shape businesses and industries over the next decade.