The majority of general partners (GPs) expect to increase spending on artificial intelligence (AI) for investment due diligence, portfolio construction and monitoring over the next two years, according to a new study.
Neuberger Berman’s report found that GPs expect AI spending to rise across all functions over the next two years, led by due diligence (91 per cent), portfolio company value creation (87 per cent), portfolio monitoring and reporting (86 per cent) and deal sourcing (81 per cent).
The research by Neuberger Berman, which manages $150bn (£111.6bn) in private markets assets, surveyed 145 GPs and analysed how they are currently deploying generative AI.
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It found that, despite being a relatively new technology, usage is already widespread, ranging from 40 to 90 per cent among respondents.
Larger and better-resourced firms showed higher levels of adoption, with 89 per cent of those managing more than $50bn in assets leading AI deployment. The main reason cited for using AI was increased productivity, alongside improvements in work quality.
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“It is remarkable to see such widespread adoption, momentum, and end user satisfaction for such a new technology, especially versus what we saw with the Internet revolution,” said Jonathan Shofet, global head of the firm’s private investment portfolios and co-investments group. “It is clear that both private markets firms and their underlying portfolio companies are rapidly embracing the power of generative AI. No one wants to, nor can afford to, be left behind.”
At this stage, usage costs remain modest, with 79 per cent of private markets firms allocating less than 10 per cent of their IT budgets to generative AI tools, the study found.
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