IRR News & Analysis

Schroders Capital CIO Discusses AI Impact on Returns, Not Headcounts

Schroders Capital, managing $112 billion AUM, asserts that AI's value in private equity (PE) lies in enhancing returns rather than reducing costs. Their May white paper highlights that about 25% of buyout deals achieve a gross IRR above 50%, while 10% yield no return. The firm has created three proprietary AI tools to aid investment processes, potentially increasing analytical efficiency by 100 times. Nils Rode, CIO, emphasizes that avoiding poor investments can significantly impact fund performance, outweighing benefits from cost-cutting measures in the sector.