Thought Leadership  •  May 18, 2020

Revolutionizing Private Equity and the Dealmaking Process with AI and Machine Learning

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In the last five years, according to Adam Nguyen, eBrevia cofounder, there have been three major forces impacting private equity, the explosion of data, increasing cost of services and the advancement of artificial intelligence.

Video Discussion Panel: AI in Private Equity

Donnelley Financial Solutions (DFIN) and Private Equity Wire hosted a panel discussion to explore how next generation technologies, like Venue, and using artificial intelligence in private equity, are driving due diligence and enhancing value creation.

During this moderated discussion, two industry experts share their views surrounding the benefits of incorporating technology within the dealmaking process to mitigate risk, ensure compliance, and lower costs, all while increasing confidence and efficiency.

Adam Nguyen and Andrew Smith walk through the three key stages of the deal making lifecycle and how PE managers can apply machine learning technologies to improve the efficiency of the entire process.

  1. Pre-deal
  2. Ongoing Asset Management considerations
  3. Exit

Moderator:
James Williams, Managing Editor, Private Equity Wire

Industry Experts:
Adam Nguyen, Co-Founder, eBrevia
Andrew Smith, Managing Director and Founding Partner, Albany Investment

Video Summary

Nguyen shares how new technologies can be applied in the private equity world and the helpful role artificial intelligence plays in the legal sector, like optimizing the review process and contract analytics. Machine learning based technologies, can improve the entire process of the deal. And more specifically, he details how these technologies can learn complicated legal concepts to assist in the arduous, meticulous, and often tedious process of combing through mountains of documents to extract key data, save lawyers time, and ensure greater accuracy. In any private equity transaction time and money are very important – AI can expedite the review of the underlying contracts to help make the deal a success.

Andrew Smith further emphasizes the importance of AI; as PE firms see lots of deals, it is imperative they review these deals quickly to make informed decisions regarding the investments. He provides a specific example surrounding the importance of cyber hygiene during the deal process; overlooking key information, or inaccurately identifying important data, can often result in large fines from regulatory bodies.

While next generation technologies can rigorously enforce discipline, which is key to any contractual documentary evidence, Nguyen and Smith both emphasize the importance of people, great legal minds and meticulous processes as the cornerstone of successful companies and deals. AI and machine learning can be evergreen features that enhance processes and help manage portfolios to create exponential efficiencies and accuracy.