.avif)
Blueflame AI contributed to CIti's GPS Report, Private Markets - Access, Innovation and New Pathways to Progress. The report offers a comprehensive overview of the evolving landscape, highlighting several key takeaways that are shaping the industry. The private markets have expanded into a $16 trillion industry, primarily driven by institutional investors. However, individual investors are increasingly seeking access through wealth managers, digital platforms, and defined contribution (DC) pension plans. The traditional divide between public and private markets is diminishing as investors adopt a more integrated approach to portfolio construction, demanding solutions that bridge both realms. Despite the illiquidity premium associated with private markets, which promises higher returns for longer asset lock-ins, there is a growing demand for greater liquidity from new investors. Innovative products like evergreen funds are emerging as potential solutions. Additionally, the secondary market is maturing, offering vital liquidity through both limited partner (LP)-led and general partner (GP)-led transactions, enabling more effective portfolio management and capital access.
AI's impact on private markets
The 46-page report identifies that technology, particularly data, artificial intelligence (AI), and digitalization, is becoming a crucial differentiator in private markets. AI is being applied across the investment lifecycle to enhance efficiency and outcomes. Here are some AI-specific use cases identified in the report:
- Deal Sourcing & Screening: AI tools identify potential investment targets by analyzing web, market, financial, and company data, filtering them based on specific criteria.
- Due Diligence: AI benchmarks company metrics against peers, identifies risks, evaluates scenarios, and drafts investment committee memos and strategy documents.
- Portfolio Monitoring: AI summarizes and analyzes portfolio data, enabling real-time peer comparisons and risk identification.
- Private Credit: AI aids in underwriting by analyzing documents and industry data to generate credit scores and extract key information from credit agreements.
- Client Services & Operations: AI generates personalized communications, drafts responses, summarizes meeting notes, and analyzes data to flag potential investor targets.
As firms reconsider their growth strategies, they face the choice of building or buying new capabilities, or forming strategic partnerships to enhance their private markets offerings and bridge the gap between public and private market expertise.
Get the report
Blueflame AI is proud to have contributed to this report, which serves as a valuable resource for understanding the dynamic interplay of AI and private markets.
The full report is available for download here.
