Private Equity Edition ·
AI Is Repricing Everything in PE
In private equity, pressure has always been the point. The model was built on it: buy, improve, exit, repeat.
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Hi, I’m Lily. I created this PE edition of the AI Dispatch for our growing community of thousands of private equity leaders and portfolio company operators navigating AI implementation.
This week’s theme: AI is now the pressure and the answer.
In private equity, pressure has always been the point. The model was built on it: buy, improve, exit, repeat. But now, the pressure has a name, and it runs in two directions at once. AI is raising the bar on what returns must look like, while simultaneously discounting the portfolios that aren’t ready for it. What once felt like a strategic choice is starting to look more like a deadline.
The answer, it turns out, is also AI. Not as a pilot to run quietly, but as infrastructure, the kind that shows up in valuations, in deal theses, and in the day-to-day operations of portfolio companies. This week’s Portfolio Gold from HRSoft is a precise example of what that looks like when it’s done right.
What GPs Are Whispering About
Bain's 2026 PE Report: As EBITDA Targets Double, PE Firms Turn to AI to Deliver
Bain's 2026 Global Private Equity Report reframes the industry's stakes with one number: 12. Where deals once required 5% annual EBITDA growth to generate a 2.5x return, today's higher rates and stagnant multiples push that threshold to 12%. To close that gap, leading PE firms are treating AI as core infrastructure. Bain identifies AI as a top-tier competitive investment, used across deal sourcing, due diligence, and portfolio value creation. The report's standout proof point is Hg's $6.4 billion take-private of OneStream Software, where AI diligence was fully integrated into the acquisition process. Firms without a differentiated strategy, especially generalists, are being left behind. Read more →
Bloomberg: Secondary Buyers Demand Up to 20% Discount on AI-Exposed PE Holdings
AI disruption fears have moved from public equities into private markets, and the secondaries market is feeling it first. Buyers are now demanding discounts of up to 20% on technology-heavy PE portfolios, a sharp jump from 5% just weeks ago, forcing some sellers to pause planned transactions entirely. The trigger: growing uncertainty over whether software holdings are positioned to survive AI displacement or be overtaken by it. Firms like Thoma Bravo, Vista, Blackstone, KKR, Apollo, and Carlyle have rushed to reassure investors, while secondary buyers like Ardian are stress-testing software exposures against more severe return scenarios. With software representing nearly 18% of US buyout deal value in 2025, the stakes for portfolio valuations are significant. Read more →
PE Firm Resurgens Backs Breezeway to Accelerate AI in Hospitality Operations
Resurgens Technology Partners, a software-focused PE firm with an $800 million fund, has made a strategic growth investment in Breezeway, the leading AI-powered operations platform for vacation rentals. The investment thesis is explicitly AI-forward: Resurgens cited Breezeway's consistent track record of AI innovation as a primary driver, while Breezeway’s CEO Jeremiah Gall pointed to the company's rich operational data across 265,000 properties as the foundation for its next phase of AI development. The capital will fund deeper AI capabilities, new product development, and international expansion. Read more →
Portfolio Gold
Every week, we’ll bring you a new, real-world example of how targeted AI deployments within portfolios are solving persistent business challenges.
HRSoft Uses AI to Rethink Compensation Management
Company: HRSoft (Gryphon Investors’ portco), a US-based compensation management software platform serving HR teams across enterprise organizations.
Problem: Compensation planning has grown increasingly complex as organizations juggle market benchmarking, pay equity compliance, and workforce data at scale. HR teams were relying on manual processes and specialist-dependent workflows, slowing plan launches and creating overhead costs that didn’t scale.
Solution: HRSoft deployed an AI-powered intelligence layer across its platform, introducing agentic tools for configuration, formula building, and workflow personalization. The system operates within a closed AI framework, keeping all data internal and giving clients control over how AI is used, directly addressing compliance and privacy concerns common in HR environments.
Results:
3x-5x faster compensation plan launches
40% reduction in overhead and support costs
31,000 curated artifacts in the platform knowledge base, reducing onboarding friction
HRSoft demonstrates a model that PE-backed HR tech companies can replicate: use AI to reduce specialist dependency, accelerate implementation cycles, and lower support overhead, all while keeping sensitive employee data within a closed, compliant framework.
Lily’s Recommendation Corner
Executive Summary of Bain & Company’s Global Private Equity Report 2026 with Hugh MacArthur
In this episode of Dry Powder, Hugh MacArthur, Chairman of Bain & Company's Global Private Equity practice, walks through his key takeaways from the firm's 2026 Global Private Equity Report. MacArthur unpacks the "12 is the new 5" thesis, why winning in this new era demands investment in AI, data capabilities, and operational systems over generic growth strategies, and why firms without a differentiated, repeatable edge are increasingly being left behind by LPs and deal flow alike. Listen here →
Lily’s Closing Thoughts
AI isn’t just changing how PE firms create value. It’s changing how the market assigns value to them. Portfolios are being priced for AI readiness before the exits even happen. That's a new kind of score, and it's being kept live.
The week’s lesson is simple, if not easy: the firms using AI as the answer are the same ones no longer losing sleep over it as the pressure.
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