Private Equity Edition ·
PE's AI-Adaptive Portfolio Purge
There's a moment in every major market shift when capital stops waiting and starts sorting.
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Hi, I’m Lily. I created this PE edition of the AI Dispatch for our growing community of thousands of private equity leaders and portfolio company operators navigating AI implementation.
This week’s theme: PE's AI disruption dividing line.
There's a moment in every major market shift when capital stops waiting and starts sorting. We're in that moment now. Major GPs are quietly conducting a ruthless audit: which portfolio companies are building AI into their operating systems, and which are just talking about it?
Some portfolio companies are proving AI adaptation works through measurable ROI that compounds quarter over quarter. Others are discovering that yesterday's winning software thesis is tomorrow's stranded asset. The dividing line is between organizations that treat rebuilding operations around AI as optional enthusiasm and those that recognize it as indispensable for survival. This week shows you exactly where that line is drawn and, more importantly, how to make sure your portco stays on the winning side before your GP starts asking harder questions.
What GPs Are Whispering About
Blackstone Portfolio Data: 77% of CEOs Boost AI Spend
Blackstone's 2026 outlook reveals portfolio-level AI momentum: 77% of surveyed portfolio company CEOs increased AI software spend versus under 50% for non-AI tools. Drawing on 270+ portfolio companies, the firm highlights hyperscaler CapEx rising 45% to $415B while $1B+ PE deals nearly doubled in 2025. Disruption risk exceeds bubble risk as industries transform overnight. Blackstone's Medline IPO hit $7.2B, trading 40% above pricing. The firm emphasizes distinguishing AI winners from disrupted losers as private markets offer diversification amid concentrated public indices. Read more →
PE firms shifting capital from legacy SaaS to AI-native solutions
Bloomberg reports that PE’s $440B+ software thesis is being challenged by AI disruption. Apollo’s John Zito shocked investors by asking “is software dead?”, then cut exposure from 20% to ~10% in 2025. SaaS multiples dropped from 24x to 18x, the S&P software index fell 15% in January (worst since 2008), and firms like Arcmont and Hayfin hired consultants to audit portfolios for AI vulnerability. While the damage is real, adaptation very much works: Zendesk pivoted successfully, generating $200M ARR (10% of revenue) from AI. Credit strategists predict 12-13% defaults in private credit under aggressive disruption scenarios, forcing GPs to distinguish AI-adaptive from AI-vulnerable software assets. The good news is that your portco can be on the winning side of this story by staying AI-adaptive. Read more →
Bain Portco Adds Analytics Database for AI Workloads
Bain Capital-backed Rocket Software is acquiring Vertica analytics database for $150M cash, primarily to expand its AI capabilities. The deal extends Rocket's modernization suite into high-performance analytics and GenAI, enabling customers to run AI workloads on hybrid infrastructure. This follows Rocket's May 2024 integration of OpenText's AMC business, demonstrating Bain's buy-and-build strategy around AI infrastructure. PwC reports 80%+ of CEOs are investing in AI and analytics, validating the acquisition's timing as portcos modernize data platforms. Read more →
Portfolio Gold
Every week, we’ll bring you a new, real-world example of how targeted AI deployments within portfolios are solving persistent business challenges.
Bynder Scales Agentic AI to Govern Brand Assets Across Global Enterprises
Company: Bynder (Thomas H. Lee Partners portco), a global leader in enterprise digital asset management (DAM) serving thousands of organizations worldwide, recognized as a Leader in the November 2025 Gartner Magic Quadrant for Digital Asset Management.
Problem: As AI-generated content explodes, global brands face an unprecedented governance crisis: marketing teams produce thousands of assets monthly across dozens of channels. Off-brand colors slip through, regulatory violations go undetected, and legal risks compound as content volume outpaces human oversight.
Solution: Bynder deployed its Compliance Agent in December 2025, expanding its agentic AI suite. Built directly into the DAM with human-in-the-loop oversight, the agent ensures brand-safe, legally compliant content.
Results:
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70% workload reduction for DAM Manager
20K assets managed
300 active users across omnichannel retail operations
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70% faster asset sharing with external partners
40% faster asset retrieval
10K+ assets governed
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€3.5M+ cost savings
15,000+ hours saved searching for files
30,000 users managing 40,000+ assets with AI-powered search
Thomas H. Lee Partners’ investment in Bynder demonstrates how portfolio companies embedding agentic AI into core operations capture market leadership as enterprises shift from manual to intelligent content governance. Bynder truly rebuilt brand control for the AI content era, proving the thesis with measurable customer ROI that compounds across global operations.
Lily’s Recommendation Corner
How Machines Will Transform Private Capital Markets with Oliver Gottschalg
In this episode of Fund Shack, Oliver Gottschalg, Professor at HEC Paris and founder of Gottschalg Analytics, presents evidence that machine learning algorithms can systematically outperform human LP allocators in private equity fund selection and secondaries pricing. The adoption barrier isn't technical after all; it's cultural, as incumbents resist disrupting themselves despite evidence their pricing models fail. For PE investors, Gottschalg's work signals that algorithmic allocation could reduce secondary liquidity costs from 10-12% to 3-5% and enable active portfolio management at scale, positioning humans as "downside governors" who veto algorithm predictions rather than alpha generators. Listen here →
Lily’s Closing Thoughts
The dividing line isn’t between companies with AI and companies without it. It separates organizations that treat AI as an operating system upgrade and those that treat it as a feature to demo. GPs are purging the latter from portfolios because credit strategists are pricing in 12-13% defaults among AI-vulnerable assets.
Simply put: the firms cutting software exposure are doubling down on companies that prove they can evolve. Be that company.
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