SENNA

CFOs Look to Gain Competitive Edge with AI Adoption

As private equity firms and asset managers grapple with market volatility, chief financial officers are increasingly turning to artificial intelligence to gain an edge. While no CFO claims to be a leader in AI, most have started experimenting with use cases across their organizations, according to a new report from Private Funds CFO.

The survey of over 100 CFOs found that 80% have already deployed or are piloting AI initiatives, with a focus on automating repetitive finance tasks, enhancing data analytics, and improving forecasting and scenario planning. "CFOs recognize that AI can provide a real competitive advantage, both in terms of cost savings and better decision-making," said Sarah Jones, a managing director at a leading private equity consultancy.

For example, one global private equity firm is using natural language processing to automate the extraction of key data points from legal documents, dramatically reducing the time required for due diligence. Another has deployed machine learning models to forecast cash flows and optimize working capital across its portfolio companies.

"The pandemic really accelerated the need for CFOs to leverage technology like AI to become more agile and responsive," noted Alex Ramos, finance chief at a $20 billion alternative asset manager. "You can't rely on legacy systems and manual processes when markets are this volatile."

Despite the growing adoption, challenges remain. Many CFOs cite a shortage of in-house AI expertise, difficulties integrating new tools with existing systems, and concerns over data privacy and security. "It's not as simple as just buying an AI software package - there's a lot of change management involved," said Ramos.

Industry experts advise CFOs to start small with pilot projects, focus on use cases that deliver quick wins, and partner closely with their technology teams. "The CFOs who are most successful with AI are the ones who take a strategic, enterprise-wide approach," said Jones.

As market uncertainty persists, the race is on for private fund CFOs to harness the power of AI and gain an informational edge over their competitors.