AI expected to disrupt private equity industry within five years

Majority of private equity professionals expect disruptive technology will alter or replace operations roles but only a small majority believe their business is at risk.

Just under two-thirds (65 per cent) of senior private equity executives believe technologies such as Artificial Intelligence, blockchain and robotics will have a positive impact on their businesses, according to Intertrust’s latest study.

As the use of these technologies become more widely used, operations roles will drastically change or be replaced entirely, said 75 per cent of respondents.

Intertrust’s study questioned over 500 executives from a variety of backgrounds including private equity, asset management, corporate, capital markets and private wealth. The study asked the participants, based in Europe, North America, Middle East and Asia, what impact the likes of these technologies are going to have on their respective industries.

Whilst 65 per cent think disruptive technology will impact their businesses, nearly the same figure (64 per cent) said they aren’t being brought in to effective action yet.

New technology is already disrupting the retail and media sectors as fintech disruptors become more widely introduced. Despite this, only 12 per cent of private equity professionals believe their business is at risk.

Out of all the disruptive technology listed, AI is the clear favourite (91 per cent) to have the biggest impact on the private equity industry in the next five years, ahead of blockchain (58 per cent) and robotics (18 per cent).

Michael Johnson, Director at Intertrust, said: “Our research has shown that private equity investors are among the most bullish about the application of technology to their business model within the next five years. However, there is undoubtedly a long way still to go, with relatively few firms applying the technology today.