AI in Private Equity: Foot Anstey’s value creation roundtable highlights

On 6 November 2025, Foot Anstey hosted the first session in its Private Equity roundtable value creation series hosted by Paolo Sbuttoni with guest speaker Zoë Webster at Authentic Innovation bringing together PE portfolio companies to discuss how AI is reshaping value creation and risk across funds and portfolios.

The discussion focused on:

1. AI trends in PE firms and portfolio companies
2. Key considerations when implementing AI
3. Deciding when to build versus buy AI
4. What level of AI PE should expect in portfolio companies
5. Are we in an AI bubble?

Zoë opened the event discussing how AI can be a strategic tool in Private Equity, there is a lot of potential, but there is also a lot of hype around AI and many questions around security, what it does and how to make AI investments deliver return.

AI trends impacting PE & portfolio companies

Zoë shared the key trends she was seeing that impact PE and their portfolio, including;

• Adoption of generative AI – ever since ChatGPT launched 3 years ago businesses across various sectors have been focused on making the most of generative AI, learning as they go on what the tech can do from them from summarising reports to contract management.

• AI Agents – companies are now starting to use AI agents to start taking actions in relatively constrained environments.

• AI Literacy – increased support is being seen to enable colleagues to get comfortable with AI.

However, there are still concerns around AI with questions around information security and how can we be certain it is safe and secure.

Key considerations when implementing AI

There are many new entrants of vendors in the AI space all wanting to work with businesses, however, there are strict requirements for them to meet and it is difficult for them to gain trust to sell their product when you have larger organisations dominating the market.

One attendee commented they had seen that their portfolios were pushed to use AI and were starting with Microsoft Copilot and bringing in tech teams to build on that as they go, they went on to say the business has high security standards so smaller companies are not able to get through. It was noted that companies such as Microsoft can give assurance and automatically hold the trust of the wider market.

If companies are not implementing AI there is a risk of shadow AI where employees are using their personal accounts on AI platforms. Microsoft and LinkedIn held a survey which showed that 71% of people are using AI in the shadows. This demonstrates a huge risk of data security and missing learnings to improve AI for your company.

AI is here to stay and people are using it so businesses need to be seen to be embracing AI to reduce this risk of shadow AI. We are however seeing that approved tools in business are powerful but generic and not for specific needs. For example, if using ChatGPT and confidential data goes into their system, this is then used for training the AI tool and can potentially be classed as a data breach.

Deciding when to build versus buy AI

AI is many things but many companies default to generative AI and with that comes issues as the data may not be complete and representative as all factors may not be available to the AI, therefore human insight is still required.

Whether building or buying AI the quality of data is crucial, if the AI does not have the correct or efficient data to pull from it doesn't work. Companies must always be mindful of where the data is coming from – is it complete? Is it representative? How valid is it?

When considering whether to buy or build AI in your company consider what the main goal is and why its important to your organisation for example, are you looking for more efficiencies, more insight or are you looking to change the experience in the way your colleagues and customers interact with the company.

Consideration also needs to be given to the data required, if the data is unique or commercially sensitive then there is a need to build the AI tool.

What level of AI PE should expect in portfolio companies

AI is powerful and a much faster way to gain insight from data, portfolio companies should look whether AI is needed and beneficial to the business, colleagues and customers.

PE houses can add real value with portfolio-wide policies and template DPIAs, supplier shortlists, shared enablement/training, group purchasing, and communities of practice to share wins and patterns.

When it comes to M&A within PE, do your diligence and probe how the target is (or isn’t) using AI.

Are we in an AI bubble?

It is clear that the level of adoption of AI in PE and portfolio businesses varies significantly. Whilst there is a significant amount of hype over what AI can do for businesses, there are some very clear benefits and operational efficiencies. Implementing AI successfully needs buy in from the top and appropriate AI policies, AI governance and data security protocols to cover increased risks.

If you'd like to explore AI strategy, governance or implementation across your fund or portfolio, please contact Paolo Sbuttoni.

For further information on Authentic Innovation please contact AI Consultant Zoë Webster on [email protected].

For further information on how we work with Private Equity portfolio companies across all stages of the investment journey to add value see here.

The Foot Anstey Private Equity roundtable series is set to continue in 2026 with our next meeting on planning and implementing your international M&A strategy for success. For more information or to register your interest contact Sarah Laughton on [email protected].