I’ve been seeing a lot of AI tools in PE lately, but how do you figure out which ones are useful? I’ve talked to a few companies, but their products didn’t deliver as promised. What are some impactful use cases for AI in PE workflows?
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Based on the most helpful WSO content, here are some impactful use cases for AI in Private Equity (PE) workflows:
Data Processing and Analysis:
Quantitative Stock Screening:
Risk Management:
Deal Origination and Due Diligence:
Portfolio Company Value Creation:
For more detailed insights and discussions, you can refer to the live Q&A session with Arctic AI on Wall Street Oasis: https://www.wallstreetoasis.com/forum/private-equity/qa-ai-will-automat…</a">Q&A: AI will automate many roles in the IB/PE world.
Sources: Q&A: AI will automate many roles in the IB/PE world. A live Q&A with Arctic, who are recruiting finance professionals to help manage that change, Q&A: AI will automate many roles in the IB/PE world. A live Q&A with Arctic, who are recruiting finance professionals to help manage that change, AI in fundamental investing, What job to take if you best want to ride the generative AI wave over the next couple of decades. Serious question., Will robots replace your consulting or financial career?
Bump. Very interested in this topic.
What do you mainly use it for + what does it not do that you'd want it to, to save more time?
I get that, but it's also quite hard to find a good overlap of both IB and CS/ML/AI skills. The point is always getting the product right. Without cs skills you don't know what's possible to build, without ib experience you may build a useless product.
... and I am working on something. I would like to hear what you think: aurelioterminal dot com
I come mostly from fundamental research
Virtually all the companies in this area are not founded by people with front office IB/PE experience, so it's not really surprising they suck. They are built by people who have no clue about the industry.
You should look for tools where this is not the case. There are a few I am aware of and they seem to do more interesting and directly useful things than just generic text oriented DD stuff. Like automating specific model workflows, or automating data cube cuts.
I do expect modelling to become highly automated in PE very quickly. I recently demoed a tool that could do LBO and merger models more accurately and >100x faster than anyone I ever met in finance. It can't do like complex stuff (the type of modelling that would happen in further due diligence) though. But was excel to excel so you could just download and iterate in excel.
What was the tool?
Can you share the tool? Would love to have something that makes it quick & easy to throw together the basics and use that as a base.
Mosaic is the name of the tool
There are a few firms now with internal ChatGPT-based platforms, including at mine. They are extremely helpful in summarizing CIMs/presentations and proofreading IC memos, meeting notes, and other written output. I use it mostly for proofreading and generally helping my written output flow and read a bit better. But otherwise, not that many use cases. Maybe we are just not good with prompt engineering, it's all about finding the right prompts
Is it not a compliance breach to feed it a CIM?
Platform at my firm is a closed internal only system so it's cleared by compliance. But definitely can't use the actual ChatGPT
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