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AI isn’t going to replace private equity.

Lee McCabe

13 Oct 2025 — 1 min read

But it is going to make large chunks of the industry look embarrassingly outdated.

• Deal Sourcing: The average associate spends ~60% of their time sifting through teasers, scraping LinkedIn, and chasing bankers. An AI-driven sourcing engine can screen tens of thousands of businesses against an investment thesis in minutes. Pattern recognition across fragmented industries? Done before you finish your coffee.

• Commercial Diligence: Why spend millions on consulting reports when AI can:
• Scan millions of customer reviews for product-market fit signals.
• Scrape competitor pricing daily and model demand curves in real time.
• Map foot traffic from satellite images to see if stores are actually busy.
• Run 1,000 market scenarios overnight that a team of MBAs would take 3 months to model.

• Value Creation: Portfolio ops teams still run on anecdote and PowerPoint. AI copilots can:
• Flag rising employee attrition risk by scanning Slack/Teams sentiment.
• Integrate ERP, CRM, call centers, and HR data into a single predictive dashboard.
• Alert you that your customers are about to churn before revenue shows it.
• Rewrite job descriptions, screen CVs, and even run first-round video interviews in 50 languages, before HR has opened Outlook.

• Exit Prep: Instead of armies of consultants producing glossy CIMs, AI could:
• Auto-build data rooms that update daily.
• Write CIM drafts, complete with visuals and competitor comps, in seconds.
• Simulate 5 different buyer universes and tell you which is most likely to overpay.

Right now, AI is like having 1,000 interns.
Very soon, it’ll be like having 50 associates.......and then? Why not 5 operating partners running 24/7 across every portfolio company simultaneously?

And here’s the existential problem: private equity is built on an apprenticeship model.
You need associates to eventually make partner… no matter how long the odds. If AI strips away the “grunt work” that was the proving ground, what happens to that model? Where does the next generation of partners actually come from?

Most PE firms are still structured around human labor and legacy playbooks.
AI shrinks the cost, compresses the timeline, and raises the bar.

The firms that figure out how to operationalize it will pull so far ahead that others will look like they’re still faxing LOIs.

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Private equity has quietly entered a new sport: competitive talent hoarding.

AI isn’t coming for middle management. It’s already rearranging the job description.