Artificial intelligence is moving quickly from the back office into the center of private equity. Firms are using it across deal sourcing, fund operations and portfolio oversight. Meanwhile, investors are asking sharper questions regarding AI, and regulators are signaling they’re watching closely.
As Goodwin partner Kaitlin Betancourt explains: “Investors want incident notifications and assurance that their confidential information won’t be fed into public AI tools without consent. Some are explicitly asking managers not to put their data into public AI systems.” AI has also become a standard topic in fundraising and diligence. LPs want to know how it’s being used, what risks are being managed and what safeguards are in place. Best practice, according to Betancourt, is moving toward comprehensive governance, with “risk assessments, cross functional review committees, oversight processes and disclosure practices.”
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