Private Equity Investors Value Infrastructure Over AI Hype
Private equity managers seeking fresh commitments face a rising technology standard from limited partners, but the differentiator is not simply artificial intelligence. Investors are focused on whether technology produces faster reporting, better data and more customized access to portfolio information, according to a new survey from Gen II Fund Services and The Harris Poll.
The survey of 205 private equity professionals, 103 general partners and 102 limited partners, found that 62% of LPs rank infrastructure sophistication as the leading characteristic of a “technologically elite” manager. LP-facing outcomes, such as speed, transparency, customization and accessibility, ranked second at 61%, followed by workflow digitization at 53%. Adoption of AI ranked below those factors, at 41%.
The findings arrive as private equity fundraising and manager selection have grown more demanding amid slower exits and pressure on distributions. Limited partners are increasingly scrutinizing operational capabilities alongside investment performance, making fund administration and investor reporting more central to a manager’s fundraising case.
Reporting remains a particular weakness. While 89% of LPs said they receive reports at or faster than Institutional Limited Partners Association guidelines, 30% still cited reporting speed as a frustration. Another 30% pointed to the lack of actionable insights, while 25% cited insufficient reporting customization. Forty-five percent of LPs ranked faster response times among their top three digital-transformation priorities.
The survey found near-unanimous agreement on the need for more flexibility: 95% of respondents said GPs should offer more customizable reporting, including 46% who strongly agreed. LPs placed particular value on benchmarking, market comparisons and statements of cash flows — information that offers context around investment performance, fund economics and liquidity.
Basic infrastructure increasingly is considered a prerequisite. Secure LP portals were viewed as table stakes by 61% of respondents, followed by automated waterfall and carried-interest calculations at 59%, company-level performance reporting at 57%, and standardized reports aligned with ILPA templates at 56%.
The study also identified a perception gap: 88% of GPs believe they have a competitive advantage in digital transformation, compared with 71% of LPs who agree. GPs were more likely than LPs to regard AI as the singular technology differentiator, 16% versus 3%.
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