The AI-Powered GP: How Agile Firms Are Using AI Tools To Close the Gap
From investor relations to deal sourcing, AI is helping GPs compete above their weight class.
Artificial intelligence (AI) is unlocking new efficiencies across the private market fund life cycle. It’s also helping smaller, less-established firms gain valuable ground. For the third and final installment of The AI-Powered GP video series, produced by SS&C Intralinks and Real Deals Media, I had the pleasure of sitting down with Neil MacDougall, chairman at Sophora, an emerging fund manager based in Germany, and moderator Nicholas Neveling of Real Deals Media.
In our discussion, we explored how AI is helping emerging fund managers evaluate opportunities faster, streamline operations and improve the limited partner (LP) experience without adding headcount. Here are some highlights from the discussion.
Private market tech stacks: then and now
Like many firms, Sophora’s tech stack — and as a result, MacDougall’s team’s productivity — has advanced significantly over the past decade. “There was a time when you could get by with Microsoft Office Suite, shared directories and a fairly basic accounting system,” he recalls of legacy tech stacks. “You might have recently implemented a CRM system and felt that you were quite tech-enabled.”
Now with an AI-forward approach, his team spends significantly less time on labor-intensive manual tasks, such as extracting company performance data to draft investment memos.
“In the past, you’d be given a ton of information which you would then lift and re-present in an investment committee memo and hope that you’re answering all the questions they’re going to throw at you,” he says. Now, MacDougall and his team use a large language model (LLM) to draft investment memos based on the firm’s unique criteria. “The drudgery that used to take several days just takes minutes now.”
Shifting competitive lines
From a broader perspective, we’re already seeing AI reshape competitive dynamics across private markets. With the ability to summarize documents and extract data faster than ever, smaller firms are keeping up with much larger, better-resourced organizations. In MacDougall’s view, emerging managers have the added advantage of agility, as they can go straight to an AI-first approach without undertaking a complex technology transition.
As a tech-native firm, Sophora recognizes the critical role its digital infrastructure plays in keeping front-to-back-office operations running smoothly. MacDougall notes that SaaS licensing models have made it easy for firms of all sizes to find the right fit: “The budget doesn’t necessarily have to be a constraint. But you have to be very interested in selecting the right functionality and the right vendor to deal with your particular situation.”
Navigating the deal market
Deal sourcing is another area where emerging managers are using AI to keep up with their more established counterparts. AI is helping private equity (PE) buyers build market maps and understand target and portfolio performance — increasingly through fully autonomous agentic workflows.
As MacDougall explains, the ability to quickly gather, process and act on data plays a critical role in gaining the first-bidder’s advantage in competitive auctions and entering primary deals with confidence.
“When you meet an owner or manager, you have a short meeting to evaluate each other,” he says. “You can differentiate your origination by being really smart and not just asking about numbers … and actually talking about the more interesting things that really matter to them in terms of their challenges and what they’d like to do next.”
Removing friction to attract new capital
On the operational side, PE professionals at smaller firms often assume several roles to move funds forward. Investor onboarding is an essential step in the fund life cycle that sets the tone for a successful partnership. It also involves tedious work that strains internal teams and creates friction for LPs.
For LPs, the decision to invest with a given general partner (GP) can be made that much easier when presented with a digitized onboarding experience. Fund management platforms with autofill and workflow management capabilities streamline the process of distributing, filling out and tracking subscription documents. “If you make that [onboarding] experience as painless as possible for LPs, they love you,” says MacDougall.
Putting data to work
Manual, labor-intensive processes slow teams down and make it difficult to deliver a transparent, high-touch experience while still allocating adequate resources to value-added tasks. LPs are always evaluating GPs, and at this point, no fund manager can afford not to choose the technology partners best suited to drive seamless fundraising, onboarding, reporting and dealmaking.
With AI-enabled platforms like FundCentre AITM and DealCentre AITM, firms can now automate and scale repetitive workflows. Link, the purpose-built AI engine driving Intralinks’ platforms, allows GPs to interrogate large document sets and unify key insights across the fund and deal life cycles, keeping everything in one place.
Thank you to our participants
These conversations throughout The AI-Powered GP video series have highlighted a common theme: AI is now a competitive necessity for private market firms. Whether improving diligence, enhancing investor engagement or streamlining fund operations, firms that successfully integrate AI into their workflows will be better positioned to compete and grow.
My thanks to Epiris’ Kathryn Pothier, Sovereign Capital’s Dominic Dalli and Sophora’s Neil MacDougall for sharing their perspectives throughout the series. For a deeper look at how AI is transforming private markets, read our new report, What AI Adoption Means for GPs and LPs. I think you’ll find it a useful companion to the video series.