EY Outlook | Private Equity Giants Bet Big on AI as Industry Transforms
- Editor
- Dec 30, 2024
- 1 min read
What's New: EY identifies six major trends reshaping private equity in 2025, with infrastructure and AI investment leading the charge while sovereign wealth funds emerge as powerful new players in US markets.
Why It Matters: As PE assets under management race toward $8 trillion by 2028, firms are radically transforming their strategies and expanding beyond traditional buyouts into new markets and investment structures.
Big Picture Drivers:
Infrastructure investments surge, particularly in data centers consuming 2-4% of global electricity
Sovereign wealth funds accelerate US investments, deploying $30B year-to-date
PE firms increasingly blend into private credit markets, filling gaps left by traditional lenders
By The Numbers:
PE firms have invested over $100B in data center projects in the last three years
Sovereign wealth funds expected to reach $18T in assets by 2030
AI-driven tools cutting transaction processing costs by up to 70%
Key Trends to Watch:
Semi-liquid fund structures emerging to attract retail investors
PE firms partnering with traditional banks to create hybrid lending solutions
Focus intensifying on portfolio company culture as a growth lever
The Bottom Line for Investors: Private equity is rapidly evolving beyond its traditional buyout roots, with firms leveraging AI, embracing infrastructure plays, and creating new investment vehicles. With assets projected to hit $8T by 2028, the industry's transformation from pure buyout shops to diverse alternative asset managers appears unstoppable.
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