30th September, London, UK – Emergent, the fast-growing community supporting the next generation of private capital fund managers, today announced the results of a new poll highlighting the increasing adoption of artificial intelligence (AI) within the industry, alongside ongoing concerns surrounding regulatory frameworks and ESG innovation.

The findings show that a quarter (25%) of private equity and real estate fund managers reported their firms are formally using AI in their operations, while a significant 50% indicated they are informally incorporating AI. This signals a growing trend of AI adoption within the private capital sector, though formalised strategies are still in their early stages.

A quarter (25%) of respondents also identified regulatory divergence between the UK, EU and USA as a worry. This points to a need for greater harmonisation across jurisdictions, as inconsistent regulations can hinder the adoption of new technologies and create barriers to innovation. A clearer, more unified regulatory framework would help private capital fund managers navigate these complexities and foster a more conducive environment for global growth and technological advancement.

When it came to ESG, only 12.5% of fund managers felt their businesses were successfully innovating in ESG products and services. Meanwhile, 31% acknowledged there is substantial room for improvement in their ESG offerings. This underscores the ongoing challenge of aligning innovation with the increasing importance of sustainable and responsible investment practices.

The poll was conducted anonymously among a group of asset manager representatives, collectively managing assets totalling 2,495m in AuM (Assets under Management).

Alex Di Santo, Emergent, said: “The results of this poll highlight the exciting progress being made with emerging technologies within the private capital sector. However, it also shines a light on the regulatory challenges that fund managers are grappling with across different jurisdictions. There’s a clear need for more harmonised frameworks to support innovation on a global scale.”

Shaun Davies, Client Operations Director at Gen II, said: “While there’s exciting progress in technological advancements, the real opportunity lies in ensuring that these innovations are adopted effectively. It’s not just about having the latest tools, like AI or tokenisation, but making sure they align with a firm’s long-term goals. As we continue to support fund managers, we also focus on integrating new technologies in ways that drive meaningful, scalable growth for them.”

Steve Gale, at CTI Digital said: “Innovation within fund management is an operational imperative. Those who can bring innovations through to actionable strategies in their own businesses, will lead the next wave of growth. By moving beyond traditional models and embracing change as an opportunity, rather than only a risk, they can position themselves to deliver long-term value in a rapidly evolving market.”

About Emergent

Focused on the private capital space, Emergent is the platform for thought-provoking, topical discussions and knowledge sharing. Through a series of face-to-face events, webinars, podcasts, research and insight articles, Emergent informs, connects and nurtures relationships with industry leaders in private equity and real estate.

Our community focuses on supporting private capital executives raising a first or second institutional fund, spinning out, diversifying away from their core strategy or whose businesses are minority- or female-owned.

Emergent provides a community and platform to support, inform and connect the next generation of fund managers by sharing knowledge, ideas, solutions and introductions.

Emergent is backed by Gen II Fund Services.

Visit our website, www.emergentinsight.org for more information.

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