Ryan Miske Speaks With Law360 About AI’s Impact on Private Equity Investment Strategies

Corporate partner Ryan Miske spoke with Law360 about how artificial intelligence (AI) is reshaping private equity investment strategies as firms apply the technology across the deal cycle, from deal sourcing and target identification to diligence, portfolio monitoring, and exit preparation.

The article discusses findings from a survey which found that 94% of private equity fund managers expect AI to reshape their investment theses within the next 18 months. The survey also highlighted an increasingly competitive market, lengthening hold periods, and a shortage of quality assets.

Miske told Law360 that AI is reshaping private equity investment theses in part by expanding how sponsors source and evaluate deals. “They’re able to process and analyze a lot more data quickly,” allowing sponsors to uncover opportunities they might not otherwise have found and evaluate a broader range of businesses and industries, Miske said.

While some sponsors may be seeking AI-related targets, Miske said many of his clients are increasingly looking for companies that are relatively insulated from technological disruption, including businesses in commercial and home services such as landscaping, plumbing, and electrical work. He said AI can improve processes and efficiency at such companies without eliminating the underlying demand for their services. By contrast, some technology investments may face greater uncertainty as AI rapidly changes the competitive landscape.

The article also highlights broader dealmaking dynamics, noting that higher borrowing costs over time can affect both existing portfolio companies and the prices sponsors are willing to pay for new investments. The resulting gap between buyer and seller price expectations can slow deal activity, Miske said, as sponsors adjust their models to account for more expensive debt. He added that deals that were done in 2021 remain particularly challenging, reflecting the rush to invest during a period of cheap debt and elevated deal activity at that time.