Private Equity Industry Faces Technological Revolution

The private equity industry is experiencing optimism for growth heading into 2025, driven by increased transactions in Q3 2024 and a focus on attracting wealthy individual investors. With an estimated $140 trillion in financial assets held by these investors, firms are working to persuade registered investment advisers (RIAs) of the benefits of private equity, despite concerns over high fees reaching nearly 5.5%. Technological advancements in AI and automation are reshaping the industry by enhancing deal sourcing and operational efficiency, providing a competitive edge. Companies like Salesforce are leveraging these trends to improve value creation for private equity firms and their portfolios. Additionally, private equity investors are significantly influencing the strategies of companies like Torrid Holdings, where they hold a substantial stake, exemplifying their power in corporate governance. The landscape continues to evolve, with new fintech tools also transforming how capital is raised and managed.