Problem and Background
The PE sector plays a critical role in driving global economic growth by funding businesses and fostering innovation. Historically, this has allowed PE funds to outperform public equities in terms of returns. However, with increasing competition and a challenging global environment characterized by uncertainty and high interest rates, the industry faces new challenges. In this context, digitalization and AI present significant opportunities for PE firms to gain a competitive edge. By leveraging AI-driven tools for deal sourcing, due diligence, and value creation, PE firms can not only increase efficiency but also improve decision quality and uncover new opportunities. Yet, despite these advantages, the sector remains notably behind in adoption. Recent studies highlight this gap: while 53% of PE managers have never used AI, only 3% employ it regularly (Plettenberg, 2023). Furthermore, although 60% of portfolio companies experiment with generative AI, only 5% of the PE funds backing them manage to scale its use effectively (Vickery & Ellencweig, 2024).
Objective of the Research Project
This research project seeks to bridge the gap in AI and digitalization adoption by developing a comprehensive playbook for private equity firms. The playbook will outline the potential applications of digitalization and AI across all stages of the PE fund lifecycle, while creating a robust framework for identifying the most significant opportunities for digital transformation and enabling PE firms to forsee common challenes and mitigate them. Achieving this goal involves conducting a detailed analysis of the PE process to pinpoint the greatest pain points and areas of opportunity at each stage. By combining these insights with the expertise of the Institute for Information Systems and Digital Business in digital transformation and AI, the project aims to create a framework identifying use cases along the PE lifecycle and guiding their prioritization, thus fostering both academic insight and tangible industry impact.
Point of Contact
Interested in participating? Feel free to reach out to Fabian Karst (fabian.karst@unisg.ch)
Problem and Background
The PE sector plays a critical role in driving global economic growth by funding businesses and fostering innovation. Historically, this has allowed PE funds to outperform public equities in terms of returns. However, with increasing competition and a challenging global environment characterized by uncertainty and high interest rates, the industry faces new challenges. In this context, digitalization and AI present significant opportunities for PE firms to gain a competitive edge. By leveraging AI-driven tools for deal sourcing, due diligence, and value creation, PE firms can not only increase efficiency but also improve decision quality and uncover new opportunities. Yet, despite these advantages, the sector remains notably behind in adoption. Recent studies highlight this gap: while 53% of PE managers have never used AI, only 3% employ it regularly (Plettenberg, 2023). Furthermore, although 60% of portfolio companies experiment with generative AI, only 5% of the PE funds backing them manage to scale its use effectively (Vickery & Ellencweig, 2024).
Objective of the Research Project
This research project seeks to bridge the gap in AI and digitalization adoption by developing a comprehensive playbook for private equity firms. The playbook will outline the potential applications of digitalization and AI across all stages of the PE fund lifecycle, while creating a robust framework for identifying the most significant opportunities for digital transformation and enabling PE firms to forsee common challenes and mitigate them. Achieving this goal involves conducting a detailed analysis of the PE process to pinpoint the greatest pain points and areas of opportunity at each stage. By combining these insights with the expertise of the Institute for Information Systems and Digital Business in digital transformation and AI, the project aims to create a framework identifying use cases along the PE lifecycle and guiding their prioritization, thus fostering both academic insight and tangible industry impact.
Point of Contact
Interested in participating? Feel free to reach out to Fabian Karst (fabian.karst@unisg.ch)