AI Speeds Up Private Equity Deals and Sharpens Legal Risk Assessment
50% of private equity pros say AI will most transform dealmaking in three years.
Why it matters: Legal teams face faster, more complex deals where AI tools help streamline due diligence and risk analysis, improving deal quality and compliance oversight.
- 50% of private equity professionals expect generative AI to transform dealmaking by 2027.
- Only 5% of firms fully use AI; 45% are testing it in workflows, including legal due diligence.
- AI processes large data sets to identify risks and opportunities quicker than traditional methods.
- 62% of dealmakers view human-only decision-making as inadequate for complex transactions.
Private equity firms are integrating AI tools to accelerate deal sourcing, due diligence, investment decision making, portfolio management, and investor communications, according to KPMG. This adoption is reshaping how legal teams support transactions.
AI can quickly analyze large volumes of financial data, contracts, and market information—both structured and unstructured—to highlight risks and patterns faster than manual review. This capability aids legal teams in identifying potential liabilities and compliance issues early (KPMG UK).
For deal sourcing, AI tools scan wider datasets to uncover more investment targets, enabling firms to focus due diligence on higher-potential deals. This means legal teams must evaluate more opportunities but with better data support (PwC).
During due diligence, AI accelerates risk assessment and opportunity analysis. Ed Brandman, CEO of ToltIQ, says AI helps make due diligence "faster and more accessible" (Worth).
Only 5% of firms have fully integrated AI in core processes, while 45% are piloting it. Survey data shows 50% of professionals expect generative AI technologies to transform their industry within three years, and over half plan major AI investments soon (KPMG).
Importantly, 62% of dealmakers believe relying solely on human judgment is no longer acceptable for complex deals, underscoring AI’s growing role in managing legal and compliance risks.
Nilesh Patel of KPMG UK notes AI’s role now extends beyond productivity: firms embed AI to improve investment choices, deal outcomes, and exit strategies while supporting legal risk controls.
By the numbers:
- 50% — Private equity professionals expect AI to be most transformative by 2027.
- 5% — Firms have fully integrated AI into processes; 45% pilot AI solutions.
- 62% — Dealmakers say human-only decisions aren’t sufficient for complex deals.
Yes, but: Though AI adoption grows, few private equity firms have fully implemented it, meaning many legal teams are still adapting traditional workflows alongside emerging AI tools.
What's next: AI investment priorities will rise across private equity in the next 12 months, with a focus on advanced AI tools for deal execution and compliance.