Private equity firms thrive on their ability to move fast, identify opportunities others miss, and execute deals with precision. But in 2025, speed and insight are no longer just about having the sharpest analysts or the best industry connections.
Smart use of AI now offers a decisive speed advantage – giving firms the ability to analyse deals faster, surface hidden risks, and automate time-consuming processes that once slowed them down. In this environment – where securing the right deal at the right time is more critical than ever – the key is to combine task automation with human verification, so that firms ensure they embrace AI to without sacrificing diligence.
The Need for Speed is Growing
The big picture is changing in private markets. While overall deal value is beginning to increase after a recent slump as interest rates rose, competition remains fierce. M&A trends suggest that while total deal value is up, this is being driven by megadeals, with fewer mid and lower market transactions available.
This means firms are increasingly forced to compete for a smaller pool of premium assets, making processes more complex than ever as buyers pursue new types of synergies and take on greater operating risks to win the deal.
To bring this point home, M&A due diligence now takes an average of 203 days, compared to just 123 days ten years ago. Using data-driven insights to be faster and more precise than the competition has become the difference between winning and losing.
With contracts becoming more complex and increasing in number, contract tasks are ripe for modernisation via AI, which can process thousands of documents in a matter of minutes, extracting key information and summarising risks. Human decision makers can then apply their own expertise, using this information to act swiftly and strategically.
Of course, success is not just about acting quickly, it’s about making the right decisions. There is more market data out there than any human can conceivably analyse, meaning inevitably, insights can be missed. Or in other words, humans have made M&As so complicated that, ironically, there is now a need to bring in AI to help them get the most out of them again. By using machine learning algorithms, firms can analyse portfolio data to identify risks and growth opportunities, predict future asset performance, identify bolt-on targets, and even assess exit readiness – empowering their teams to act on the best information available.
As Lisa Weaver Lambert, author of The AI Value Playbook put it in our recent report on AI adoption: “Investment committees are increasingly relying on AI for its unparalleled ability to surface patterns and predictions that humans might miss…it’s a voice at the table.”
Keep Things Manageable
So if increased speed is becoming a necessity, what is holding PE firms back?
One issue is perception. The view persists that AI adoption means full-scale transformation, rebuilding systems from the ground up. But the most successful firms aren’t overhauling their operations overnight. They’re starting small, deploying AI in targeted areas where it can quickly generate ROI while mitigating risk.
To cite one example use case, GTIS Partners was spending up to ten days completing due diligence questionnaires (DDQs) as part of the investor acquisition process. After applying machine learning to ensure that DDQs were centrally stored and easily searchable, timelines were down to between just one to three days.
In fact, many of the most effective applications of AI are found in routine but time-consuming legal and administrative tasks. Firms are already using AI to handle NDA and contract reviews and manage investor side letters, making compliance a simpler process. Even in deal origination, AI-powered tools can help to analyse market trends, spotting promising opportunities before they hit the mainstream. These applications offer a practical starting point, delivering measurable ROI without overhauling existing workflows, and allowing experts to focus on finding new opportunities rather than admin.
The Human Touch
Hesitation may also partly stem from the worry that AI will remove human oversight, potentially introducing security risks. This is understandable, considering private markets firms handle large volumes of sensitive and confidential data.
Combining multi-layered security and keeping a human-in-the-loop is the best approach. Just as firms do due diligence on their day-to-day deals, they should do the same when bringing AI on board in order to reap the benefits. Furthermore, it is worth remembering that while senior human expertise is essential, human error and bias in processes also exists. Just as human oversight can help make the most out of AI tools, machines can also allow for precise analysis to support decision making.
Look for sector-specific private markets tools built with security as a priority, ensuring client data remains offline, doesn’t leave their cloud environment, and is siloed between clients. Looking out for appropriate security accreditations, such as ISO/IEC 27001:2022, SOC2, and Cyber Essentials is a great starting point.
The most effective AI tools are designed to empower staff. They function best when they maximise AI’s ability to process, analyse, and summarise data infinitely faster than humans, while retaining human judgment and experience.
This combination is the key to a competitive edge. Those who hesitate will soon find themselves at a structural disadvantage. In 2024, many firms realised that they should have already been exploring AI. In 2025, those who remain on the fence will struggle to compete at all.
Private equity has always been about staying ahead of the curve. There is a real risk that firms that wait for a “perfect moment” to adopt AI will find themselves outpaced by those who take decisive action. In an increasingly competitive environment, every advantage counts and AI stands to be a significant one.
The author is Robin AI’s Head of Alternative Assets
