PE executives say their firms face many challenges while conducting due diligence, including:

44% say there is a lack of quality third-party data, hindering their decision-making
38% believe outcomes of due diligence are compartmentalized and siloed, impacting post-deal integration and synergy realization
33% say they struggle to find the right talent that can execute their value creation plans

A key issue is defaulting to identifying risks instead of also analyzing value creation opportunities:

While 40% of executives strive to maintain equal focus on both aspects, more than two-thirds of the rest lean towards scrutinizing red flags rather than post-deal value creation

A majority of those surveyed said finding and extracting value from investments has become more challenging:

75% agree or strongly agree that over the past five years, PE investments have grown more complex (up significantly from 2023 when 50% thought investments were complex)

Generative AI has the potential to help solve these challenges, particularly around deal screening and due diligence:

Generative AI could automate up to 30% of due diligence tasks and augment an additional 20%, which would significantly cut the time spent on manual processes.
97% of PE executives see at least some impact from the adoption of AI, generative AI, automation and analytics
62% anticipate these technologies to fundamentally transform these crucial processes

Mergers and acquisitions executives also see value in generative AI, according to a recent report, Reinventing M&A with Generative AI:

70% of M&A executives say generative AI could boost expected returns on their transactions and 64% expect it to revolutionize M&A deal processes more than other recent technological advances
The report also found that M&A executives show bias toward making more generative AI investments in pre-deal activities

Why It Matters

Accenture Survey: Gen AI Has Potential to Address Due Diligence Challenges for Private Equity