AI is no longer a futuristic fantasy for private market CFOs. New research reveals how finance leaders are harnessing artificial intelligence for immediate efficiency gains, but the real prize? smarter, data-driven forecasting remains just over the horizon.
For a while now, the chatter around artificial intelligence has been inescapable. Every conference, every newsletter, every strategy meeting seems to circle back to AI’s transformative power.
But for CFOs in the private markets, it’s no longer a conversation about “if” but “how.” New research from global investor services firm IQ-EQ reveals that the revolution isn’t coming, it’s already here. In fact, four out of five private market CFOs are already harnessing AI to drive tangible efficiency gains.
The survey paints a clear picture of AI’s practical applications. It’s not just a shiny new toy; it’s a tool that’s actively improving core finance functions. Over half of respondents (56%) report a significant improvement in their operational efficiency thanks to AI. They’re using it to optimize fund performance analysis (33%), streamline data collection (29%), and even elevate the client experience (27%). This is about moving from theoretical promise to real-world performance, freeing up valuable time for strategic thinking.
Still, the path isn’t perfectly smooth. The report acknowledges that one in five CFOs are still struggling with effective implementation, a clear sign of uneven digital maturity across the sector. This is a crucial point: while the industry is making strides, a lack of foundational readiness can be a major roadblock.
Beyond Efficiency: The Untapped Potential of Predictive Analytics
While the current wave of AI adoption is all about efficiency, the next, more powerful phase is about prediction. The IQ-EQ whitepaper identifies predictive analytics as the “most underutilised area” with immense potential to transform forecasting and decision-making. As Justin Partington, IQ-EQ’s Global Head of Fund and Asset Managers, notes, “The real prize lies beyond incremental improvements: embedding advanced tools like predictive analytics into everyday decision-making.”
The concept isn’t new; other industries have been using predictive analytics for years. Think about a real estate firm predicting future vacancy rates or a transportation company forecasting toll road usage. The same principles, Partington argues, can be applied to internal operations to optimize hiring, manage cash flow, and strategically shape the workforce. Instead of simply looking at last quarter’s performance, the focus shifts to answering a more critical question: what will performance look like 6-12 months from now?
This isn’t about guesswork; it’s about being proactive. As the whitepaper states, “To have informed answers to these questions, CFOs need to ensure their teams can collect and analyse this data.” This is where the rubber meets the road AI can’t perform its magic without a solid, well-managed data infrastructure.
The Unavoidable Truth: Data is Everything
The research makes it abundantly clear: the biggest barrier to unlocking AI’s full potential isn’t the technology itself, but the lack of a clear data strategy. A staggering 18% of CFOs surveyed admitted their organization doesn’t have one. The culprits? High costs for system upgrades (27%) and a persistent talent shortage (22%) for skilled data professionals.
This is a stark reminder that digital transformation isn’t just about plugging in a new tool. It’s a foundational effort. As IQ-EQ’s Global Head of Real Assets, Tamas Mark, wisely points out, “You need to start with a good, solid data platform… You really can’t expect good outputs without good inputs.” The “noise and hype” around AI often distracts from this fundamental truth.
A Juggling Act: Priorities in a Tough Market
CFOs are, and have always been, masters of the balancing act. The survey confirms this, highlighting a top three list of priorities for value creation: fund financing (42%), cost optimization (40%), and digital transformation (38%). These figures reflect a world of “higher-for-longer” interest rates and market volatility where CFOs are under immense pressure to “do more with less.”
The complexity of modern fund financing, for example, demands a robust treasury management system to mitigate risk, as highlighted by Mark. Beyond internal operations, the demands of external stakeholders are also evolving. More than half (55%) of the surveyed CFOs reported making “substantial operational adjustments” in the past year just to meet limited partners’ (LPs) growing demand for transparency. With increased side letters and bespoke reporting requests, the administrative burden and cost is only growing.
The takeaway from the whitepaper is a powerful one: the firms that will win in this market are those that stop treating data as a mere administrative task and start seeing it as the engine of their future growth.
The question, as one expert put it, isn’t just “how do we use AI?”
but
“what business problem are we solving, and how can we solve it better with data and technology?”
It’s a shift in mindset that will define the next era of private markets.