How Artificial intelligence will kill junior private equity jobs
What's your comment and thought on the recent article published by Sara Butcher on eFinancialcarriers stating that junior private equity roles will be taken out by AI?
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As someone with significant expertise in A.I. and also an 2nd year analyst in PE at a well known fund, this is just bullshit. As a tip, do not believe much you read of EFC
I think this reply is spot on - also legal isn't going to get AI'd away as someone below said - more and more of the drafting and research, yes - that's already here (even Westlaw, Thomson Reuters, CaseText - the platforms every law student uses has AI built director into it). But at the senior level where we have to find creative structures and at the junior level the custom work that will have to go in to support those structures is safe - for now. See below.
For the sake of this thread, you have to start at first principles - AI is any type of machine that can think. Thus if I program a machine with deterministic behavior to follow a set of rules given observable inputs, but it can't do anything with "learning" new information - that is AI.
Now machine learning is what most of us think of when we say "AI" - allowing a computer to learn a set of rules from data. There are a lot of different ways to fit these models - but a common example is "deep learning" where in a very generalized form for this audience we essentially say that we want to fit a line to numbers, we want to run a regression, we want to find the beta (this is very very generalized, although with kernel methods - its closer to think this way)
The important thing to realize here is that what makes ML different is that it can learn rules from previous behavior by itself. Traditional, "deterministic" programs can only run on the logic that the programmer writes - i.e. it can't learn its own rules.
Therefore to say that legal or finance is going to be replaced by AI is to say that everything we do has been done before - while that is true - I don't think an MD or clients mind is predictable and even the most mundane analysis require something to change - some new piece of information that the machine hasn't seen before has to be inferred - UIPath and Automation anywhere are helping us get rid of a lot of the repetitive tasks in banking, but they are still going to need to be supervised and output customized.. The data to train these models just doesn't exist.
Second, you need somewhat standardized data - or at least a data lake (like Apache Spark i.e. Databricks) that we can pipeline out of to be able to apply models. As everyone here knows even if we could just hook up to our clients ERP and plug our model in - the data is not going to be pristine, the data is not going to be the same we saw for our last client, the data needs to be auditable and right. The data is a significant gating item that is not going to be solved anytime soon. Maybe if you are VEP and you impose more of those standardizations on your operating businesses... maybe
I can keep going - but the short of it is, client data is still going to need to be scrubbed and there is a significant amount of unpredictability and catering to even the most "tech-savvy" MDs to be done by analysts and associates that junior roles are here to stay. Hopefully we can just automate a little bit more of pulling together WGL's along the way.
What the fuck was the back half of your post and why the hell are you in banking lol?
The article is complete nonsense. If you read the testimonial from the supposed senior PE partner, I am 95% sure all he has done is got some developer to codify a set of 'if-else' statements that screens the investments. E.g., 'if P/E ratio <= 25 add company to list'...
This is not A.I. because there simply is no model that is learning anything over time. They have just thrown 'A.I.' into it to sound cooler in their new fund prospectus.
Exceedingly strong username / post content ratio
100% agree. The quality of the outputs will rely on the quality of the inputs. Until a machine learning algo can improve the quality of the inputs without manual oversight, there's tons of work to be done. For now, it'll just be buzzwords
The more articles I read on that site, the more that site seems to be Buzzfeed for finance related info. I wouldn't put too much stock in anything they "report"
Bullshit. That website’s trash and the author’s beat asf
Lol - wouldn’t AI replace literally any other career first? To me, the only real educated positions that AI can take out are:
1. FP&A
2. Ops
3. legal (only a matter of time)
4. Advertising / marketing
You think AI can replace lawyers? That is one of the most human sense demanding job ever lolz
You think robots can put up with VP comments without losing their sh*t? Come on now! We good.
Love it when people who don’t understand what AI/ML technology is opine on what AI/ML technology can supposedly do.
This is bullshit. At least on the VC/growth side, juniors are the ones making the first call.
The top firms don’t select investors based on who has the most AuM, they select among great investors based on trust and relationship. I’ve seen firms turn down checks from the equivalent of GA / KKR for smaller funds because they trusted the team and didn’t like the KKR guys.
A computer can’t do that. You need to get a foot in the door and maintain it.
Also, there is a lot of judgement call about competitive advantage, barriers to entry, etc. It’s not just about numbers
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