Private Equity Findings, Issue 20 | Coller Capital

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25 July 2024 Publication
Research & Insights

Private Equity Findings, Issue 20

Topics
Foreword By the numbers
Retrospective: A bigger picture
Overview Understanding LPs performanceThe role of academic research in PEThe most influential pieces of academic researchThe affect of the 2006-07 credit bubble Resilience of the PE industryThe the growth of private debt fundsAreas of current researchAreas of research opportunities?
What’s at stake?
Roundtable: Will AI transform private equity?
Overview PE embracing AI technologiesAI origination for VC investmentsThe limitations of AI & lack of dataAI in decision makingUsing AI to predict future outcomesDo LPs really need AI to process qualitative information?AI techniques to predict company director performanceDo large networks and directorships mean poor performance?What aspects of PE are ripe for AI disruption?AI for PE: hype vs. reality
Time for a new model?
Overview Time for a new model: The research viewpointTime for a new model: The investor viewpoint
The side letter arms race
Roundtable: Will AI transform private equity?
Foreword By the numbers
Retrospective: A bigger picture
Understanding LPs performance The role of academic research in PE The most influential pieces of academic research The affect of the 2006-07 credit bubble Resilience of the PE industry The the growth of private debt funds Areas of current research Areas of research opportunities?
What’s at stake?
Roundtable: Will AI transform private equity?
PE embracing AI technologies AI origination for VC investments The limitations of AI & lack of data AI in decision making Using AI to predict future outcomes Do LPs really need AI to process qualitative information? AI techniques to predict company director performance Do large networks and directorships mean poor performance? What aspects of PE are ripe for AI disruption? AI for PE: hype vs. reality
Time for a new model?
Time for a new model: The research viewpoint Time for a new model: The investor viewpoint
The side letter arms race

Roundtable: Will AI transform private equity?

A feverish excitement has developed around advances in artificial intelligence over the past 18 months, but how will it affect private equity and venture capital investing? Will it be used at the portfolio company level to help with decision-making? Or perhaps by limited partners to improve fund selection processes? Three research papers explore these areas, and we discuss the findings with the authors and three seasoned practitioners.

PE and VC firms – along with their LPs – are experimenting with AI-driven data analytics technologies, including machine learning and natural language processing, as they seek to enhance decision-making processes and improve selection techniques.

The efficacy of AI in a private markets context remains largely unproven, however, and many remain sceptical of the claimed benefits. Will algorithms really replace intuition in the relationship-driven realm of fund selection? Can a technology trained on historical information predict breakthrough innovations for VCs? Can AI help build better boards?

Three authors of academic research on AI in VC, in fund investment selection, and in company board appointments explain their findings and discuss them with three practitioners.
Chaired by Amy Carroll

Meet the speakers

 

Maxim Bonelli

Maxime completed his first PhD in mathematics at the National Institute for Research in Digital Science and Technology. He subsequently worked as a quantitative researcher in the asset management industry, before returning to academia to complete a second PhD, in finance, at HEC Paris.

 

Anne Glover

Anne worked in manufacturing and strategy consulting before joining Apax Partners in 1989. She became COO of one of her investee companies, Virtuality Group, after it listed in London, and then returned to investing as a business angel before founding Amadeus with Hermann Hauser in 1997. She is currently serving a term as non-executive director in the Bank of England’s Court of Directors.

 

Merrick McKay

Merrick joined abrdn in 2014. He is responsible for the firm’s European PE business. Before joining abrdn, he was head of European investments in Macquarie’s private markets division. He was also a partner at Primary Capital.

 

Léa Stern

Léa is an assistant professor in the finance and business economics department at the University of Washington, Foster School of Business. She is also a visiting scholar at the Allen Institute for Artificial Intelligence.

 

Ludovic Phalippou

Ludovic specialises in PE and asset management research. He has a degree in economics from Toulouse School of Economics, a master’s in economics and in mathematical finance from the University of Southern California, and a PhD in finance from INSEAD.

 

Joshua Lowe

Joshua joined Coller Capital in 2020, where he is responsible for the investment team’s application of data science. He has a decade of experience in applying machine learning to solve commercial challenges and was previously a lead data scientist
at SparkBeyond, and held data scientist positions at Anglo American and Engie.

Limited Partners versus Unlimited Machines; Artificial Intelligence and the Performance of Private Equity Funds, by Borja Fernández Tamayo and Flo...

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