PE firms in today’s high-interest rate world are feeling the squeeze. Unrealized assets have ballooned and holding periods have stretched. Multiple expansion isn’t the reliable play it once was, and leverage costs a pretty penny.
But there’s good news: while traditional financial engineering might not deliver like it used to, Generative AI offers something better: a powerful new value creation lever, effective regardless of where interest rates go next. In fact, AI is an immediate value driver that could become your primary engine for returns in an uncertain market.
Why GenAI, right now?
It wasn’t all that long ago that traditional AI and Machine Learning first reared its head. But the barrier to entry was high: implementation demanded robust data environments and extensive prep work. Most portfolio companies were still working toward foundational capabilities—establishing visibility into key metrics, building basic inventory planning systems, and getting their arms around the data. Without the appetite (or readiness) for more advanced solutions, firms stuck with the familiar playbook: financial engineering and M&A.
GenAI is different. It’s faster, cheaper, and delivers results without requiring months of preparation. It lets you pivot from asking, “Will AI readiness disrupt my investment thesis?” to “How can I use AI to create value right now?”
And the data doesn’t lie. In 2019, AI could complete a two-second human task with 50% accuracy. By 2025, it’s handling hour-long tasks at the same success rate. In other words: what might take an analyst an hour, AI can do in seconds—and it’s only getting better with time.
For portfolio companies, this translates to measurable dollars. The penalty for failure is low, which means companies can run multiple small AI experiments across functions. Even if only a handful succeed, the ROI is substantial. In other words: AI is low risk, low effort, and high reward.
GenAI in action:
We’ve built custom GenAI tools that are already moving the needle for PE-backed companies. For example:
- A tool that accelerates investment opportunity evaluation, letting your teams assess more deals faster and close more transactions.
- A tool that extracts pricing insights from 50,000 complex customer contracts, already saving $10M by eliminating manual review of intricate clauses
What about agentic AI?
Agentic AI takes generative capabilities one step further—and in 2025, it’s at the forefront of AI capabilities. These systems don’t just make decisions but execute them, and organizations who don’t leverage agentic AI are missing opportunities to automate complex workflows, accelerate strategic execution, and unlock compounding efficiency gains that traditional GenAI tools alone can’t deliver.
Agentic AI in action:
We’re building agentic AI capabilities for PE-backed companies that breed measurable efficiency gains and cost savings. For example:
- A comprehensive GenAI tool for advanced email sentiment classification that helps detect high-risk customers for a client suffering from high churn. Our machine learning solution analyzes customer interactions, operational and service KPIs, and relationship indicators to identify at-risk customers with 90% accuracy, potentially adding $18M in retained ARR. We also achieved a 5-percentage point improvement in service quality perception.
- An inventory planning solution with reasoning agents that delivers real-time asset placement recommendations, optimizing utilization while factoring everything from weather patterns to holidays and customer behavior. This enhanced asset utilization, lowered subrentals, and reduced asset transfer costs by combining reasoning models with machine learning and optimization techniques.
Don’t let data perfection stop you from AI implementation
Yes, data readiness matters. We’ve seen lack of data readiness be AI’s demise—including for a $700M global enterprise that thought they were AI ready, but were tripping over their 20 different data sources spanning ERP, CRM, CPQ, etc. Limited data visibility caused their team to struggle to develop a coherent AI roadmap. And despite having various Business Intelligence dashboards, their fragmented data landscape constrained their ability to identify high-impact AI opportunities.
But here’s what separates Accordion: we don’t just diagnose problems; we solve them. We know how to navigate the most complicated and fragmented data landscapes and still deliver value quickly.
The bottom line?
There’s a lot of uncertainty in the market right now. But we can be certain that GenAI will continue to be a vital value creator. The beauty of AI is versatility; unlike financial engineering that relies on favorable market conditions, AI-driven operational improvements are effective in any economic climate. They’re the all-weather tires you need.
At Accordion, we’re not just spectating the AI race—we’re leading it. With our expertise in developing transformative AI solutions for portfolio companies, we help clients accelerate their path to exit. And in today’s private equity landscape, the question isn’t whether you can afford to invest in AI. It’s whether you can afford not to.
Want to learn more about how GenAI can transform your portfolio? Let’s talk.