Artificial Intelligence (AI) is becoming indispensable in private equity, yet firms often struggle to harness it effectively. As a serial entrepreneur who’s spent years refining operational strategies, I’ve noticed a recurring issue. PE firms dive into AI with impressive pilots but often fail to turn these experiments into tangible business outcomes. The secret ingredient? AI advocates within the organization.
Why Private Equity Needs AI Advocates
Deploying AI successfully isn't only about tech capability. It depends on ownership, sustained incentives, and finding the right people to champion the cause. Without advocates driving adoption strategically, tools often sit underused despite their potential.
Let’s break it down: AI advocates are internal players who act as translators between tech potential and practical application. In private equity, they are people who understand the firm's culture, how deals are made, and where digital tools fit in seamlessly.
How Lack of Ownership Undermines AI Initiatives
Private equity teams often work at a dizzying pace, due diligence, data analysis, compliance checks… the list goes on. Adding an AI tool sometimes feels counterproductive. When no clear owner is responsible for adoption, implementation stalls.
For example, operational benchmarks supported by AI could help reduce manual analysis by up to 30%. But if deal teams aren’t aligned around integrating automated analytics, the tools become underutilized. This is why firms need dedicated advocates who prioritize these shifts.
Who Should Be the Advocates?
AI advocates don’t have to be senior management. Sometimes, mid-level associates with hands-on experience unlock adoption faster. What matters is the drive and insight to connect AI processes with results the firm truly cares about.
Traits of Successful Advocates:
- Clear understanding of the PE firm’s long-term goals.
- Ability to champion AI’s benefits without over-simplifying.
- Expertise in bridging technical functions and operational realities.
Startups like Blackstone and EQT prove this works. Their success with platforms built on AI-driven predictive models has been largely due to leadership fostering advocates internally. Learn about EQT’s Motherbrain platform and its role in real-time data integration for M&A through this resource.
Guiding AI Adoption: A Practical Framework
If you’re wondering how firms can embrace AI effectively, here’s a guide:
- Formal Advocate Roles: Assign responsibilities relating to AI adoption. Fund managers, deal strategists, or tech leads could split time between traditional roles and innovation.
- Structured Incentives: Rewarding clear outcomes ensures advocates get results. Bonuses for engagement metrics or cost-saving due to AI help maintain focus.
- Visible Leadership Support: When partners talk about the importance of AI, their support creates momentum. Public communication fosters team buy-in.
- Training on Usability: Educate the team not just on how AI works, but precisely where and when they should use it. Simplify its conflict-free integration into workflows.
- Track Usage and Optimize Feedback Loops: After deployment, measure success: time saved, improved portfolio analytics, or higher deal closure rates supported by predictive dashboards.
Common Mistakes to Sidestep
Avoid these pitfalls, which often cause AI adoption to fail in private equity environments:
- Treating AI as a "nice-to-have." Without a pressing reason or champion, most tech ends up on the back burner while traditional spreadsheets get used in the trenches.
- Overselling the capabilities. Not every AI tool is a perfect fit for every workflow. An advocate should understand when to say no and work to tailor solutions within reasonable boundaries.
- Ignoring junior team member input. New analysts, who immerse themselves in data workflows more deeply, might offer untapped expertise on practical challenges of integration.
- Neglecting compliance from the start. Regulations can penalize firms if poorly calibrated algorithms create non-compliant gaps, so it’s essential to include compliance teams early.
AI Adoption Trends Shaping Private Equity
Case studies highlight impressive growth trends for PE firms embracing AI systems with independent advocates. Tools now handle portfolio due diligence or predictive deal scoring in hours rather than weeks. According to research from Holland Mountain, AI-based analytics yield efficiency gains across risk assessment, document mining, and investor reporting.
But this innovation remains gated by human stewardship, tools alone can’t adapt themselves to complex financial landscapes.
Conclusion
Private equity firms that succeed in AI adoption prioritize advocacy, creating visible systems to ensure results. It’s not just about acquiring tools, it’s about people pushing the firm towards efficiency and data-driven clarity.
If you’re running a PE firm, your next step may be identifying potential internal advocates, allocating their time formally, and tying measurable outcomes like deal performance to incentives.
The future isn’t AI in isolation, it’s AI with advocates reshaping how private equity operates under their watchful eye.
FAQ
1. Why is AI becoming indispensable in private equity?
Artificial Intelligence (AI) is transforming private equity by enhancing efficiency and decision-making processes. It helps firms with deal sourcing, portfolio management, financial modeling, and risk analysis, significantly reducing manual workload and enabling faster, data-driven decisions. Read about AI in private equity at Pictet
2. What are the main barriers to AI adoption in private equity?
Key barriers to AI adoption include a lack of clear ownership, misaligned incentives, resistance to change, reliance on outdated tools like spreadsheets, and negligence in integrating compliance measures. Successful adoption requires a focus on organizational change rather than solely the technology itself.
3. What are AI advocates, and why are they important in private equity?
AI advocates are internal players who act as champions for AI adoption in private equity firms. They bridge the gap between technological potential and practical application, ensuring the successful integration of AI tools across workflows. Learn more about the need for AI advocates in private equity
4. What traits make a successful AI advocate?
Successful AI advocates understand the firm's culture and goals, communicate AI's benefits effectively, and connect technical possibilities to real business outcomes. They are usually hands-on, tech-savvy individuals motivated to drive change.
5. Who can be an AI advocate within a private equity firm?
AI advocates can come from various roles, including mid-level associates, senior management, fund managers, or tech leads. The key is not their seniority but their ability to integrate AI's potential into the firm's operations.
6. What are the best practices for empowering AI advocates in private equity?
Empowering AI advocates includes formalizing their roles, providing structured incentives tied to measurable outcomes, offering training on technical tools, securing leadership support, and tracking usage of AI platforms for continuous improvement.
7. What are the common mistakes that private equity firms make when implementing AI?
Common mistakes include treating AI as a "nice-to-have" rather than a necessity, overselling its capabilities, ignoring input from junior team members who work on daily operations, and neglecting compliance concerns during implementation.
8. How are companies like EQT and Blackstone succeeding with AI?
Firms like EQT and Blackstone have successfully incorporated AI by fostering internal leadership and leveraging proprietary platforms. For example, EQT's Motherbrain platform utilizes real-time data for valuable insights in mergers and acquisitions. Learn about EQT’s Motherbrain platform
9. What are some AI adoption trends in private equity?
Trends highlight significant efficiency gains in due diligence, deal scoring, portfolio analytics, and investor reporting. Advanced AI tools can complete tasks like portfolio due diligence in hours, driving faster and more accurate decision-making. Read about AI use cases in private equity on Holland Mountain
10. How has AI improved value creation capabilities in private equity?
AI enables private equity firms to streamline processes, reduce costs, enhance portfolio management, and access real-time data insights. This results in smarter investment strategies and potentially leads to higher financial returns. Discover how AI drives value in private equity
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.
