Artificial intelligence is now widely adopted across the UK private capital industry, with nine in ten firms using the technology to support at least one business activity. This is according to exclusive data from UK Private Capital shared with City AM.
Over 90 per cent of private equity and venture capital firms confirmed they use AI for due diligence checks and document reviews. An additional seven per cent plan to implement these uses. Furthermore, 84 per cent of firms employ AI for deal sourcing, market mapping, and administrative and back-office tasks.
Firms are also leveraging AI for portfolio management, with nearly 80 per cent reporting its use for monitoring, performance analysis, and investment reporting. Michael Moore, chief executive of UK Private Capital, stated that "adoption is now widespread across the industry."
Beyond their own operations, 93 per cent of private capital firms are encouraging their portfolio companies to adopt AI, particularly for administrative tasks. Some also advocate for AI use in product development, data analysis, and customer support. However, AI use in compliance, legal, risk management, and financial reporting is less encouraged, reflecting associated regulatory and governance burdens.
AI minister Kanishka Narayan highlighted the "important role private capital firms are playing in supporting AI adoption." The government aims to make the UK the "fastest adopter of AI in the G7," with former chancellor Rachel Reeves pledging £2.5bn towards this goal.
Despite this accelerated adoption, the Financial Conduct Authority (FCA) has called for increased powers to regulate AI. The watchdog noted that AI tools are not currently regulated by them, meaning consumers lack access to compensation or protection from potential harm if AI-driven financial advice proves incorrect.