PE Firms Deploy Strategic AI Playbooks to Drive Portfolio Value

What's New: 

Bain & Company's 2025 Global Private Equity Report reveals that nearly 20% of PE portfolio companies have operationalized generative AI use cases with concrete results, while most remain in testing phases. According to Bain, leading firms are making significant investments in AI capabilities, sharing learnings across portfolios, and helping companies apply AI to strategic priorities rather than unfocused experimentation.

Why It Matters: 

In the second year of generative AI's rapid evolution, private equity firms are discovering how to translate technological promises into tangible ROI. The firms developing organized approaches to AI implementation are creating competitive advantages through enhanced products, boosted revenue, and expanded margins via operational efficiencies.

Big Picture Drivers:

• Strategy-first approach treats AI as a tool supporting business priorities rather than a standalone initiative

• Organizational investments in tech capabilities, AI talent, governance protocols, and expert advisors keep firms ahead of rapid developments

• Knowledge-sharing systems between portfolio companies accelerate learning and prevent reinventing solutions

• Implementation focus on practical ROI-generating use cases rather than unfocused experimentation

• Change management strategies help overcome employee resistance to technologies perceived as job threats

By The Numbers:

• Survey of investors representing $3.2 trillion in AUM shows majority of portfolio companies in AI testing phase

• Nearly 20% of portfolio companies have operationalized AI use cases with concrete results

• One company achieved 40% cost reduction in content production processes using AI

• Another generated $5 million in new revenue from an AI auto-fill feature in its first year

• Software productivity increased 22% through AI-enabled code assistance in one major replatforming project

Key Trends to Watch:

• Vista Equity Partners expects AI's impact to rewrite the Rule of 40, pushing the standard for revenue growth plus margin to 50% or even 60% over the next three to five years.

• Apollo Global Management's center of excellence model provides portfolio companies with centralized AI expertise, vendor appraisal, and implementation partnerships.

• Hg leverages its specialized focus on business software companies to facilitate peer learning and competitive innovation across similar business models.

• Agentic AI and "thinking" models are advancing rapidly, promising transformative impact for firms that understand them deeply.

The Wrap: 

Private equity's approach to AI implementation varies based on firm culture, specialization, and resources, but all successful strategies solve for speed and focus. Leading firms are helping portfolio companies move beyond experimentation to applying AI against their most important strategic imperatives where it can change competitive dynamics.

Read Full Report: Bain & Company's 2025 Global Private Equity Report