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Investors are already using these technologies to transform companies, make better decisions, and boost returns.
Copyright: bain.com – “Harnessing Generative AI in Private Equity”
The private investors taking full advantage are already using it to transform portfolio companies, sharpen due diligence, and make investment professionals smarter.
They are also finding that focus is key: Targeting investment toward a few strategic or operational objectives is essential to producing measurable improvements at the bottom line.
A year into the explosive advent of generative AI, it’s become increasingly obvious that these technologies truly do promise game-changing disruption for many industries and business functions.
While there’s been no shortage of wild-eyed exuberance since ChatGPT launched in late 2022 and showed the world what generative AI is capable of, there’s been no shortage of substance, either.
Generative AI is a critical reasoning engine capable of having an open-ended conversation with a customer, producing rich marketing content, and scanning vast stores of data to provide deeper insights. The impact across industries and business functions is already plain (see Figure 1).
In private capital, we see firms mobilizing in three important ways:
- Within the portfolio, they are wasting no time gaining insight into the potential impacts and opportunities across companies and industries. Will these technologies disrupt a portfolio company’s value chain or economic model? Is there a chance to lead the change by leveraging generative AI? With a short list of companies in hand, firms are producing results by linking initiatives to strategy and executing through rapid test-and-learn efforts. They’re finding that focus and change management matter—a lot.
- In due diligence, leading teams are developing scorecard-based protocols to assess generative AI threats and opportunities in every diligence the firm takes on. The aim is to make it as routine as legal or commercial diligence. Firms are also using AI tools to speed up and sharpen the underwriting process. In many cases, generative AI presents the unique opportunity to build prototypes in diligence that can rapidly prove (or disprove) a disruption thesis.
- At the firm level, generative AI offers plenty of ways to streamline or automate back-office functions. But its real power is to dramatically expand the scope of information that the firm brings to bear on investment decisions. These tools can leverage a firm’s scale by making institutional knowledge instantly available to everyone who needs it.[…]
Read more: www.bain.com
Der Beitrag Harnessing Generative AI in Private Equity erschien zuerst auf SwissCognitive | AI Ventures, Advisory & Research.
