Private Equity• 6 min read

How PE Firms Are Using AI to Source Better Deals

Marwan Bardaji•

How PE Firms Are Using AI to Source Better Deals

In the competitive world of private equity, sourcing isn't just about finding deals - it's about finding the right deals before anyone else. I've been thinking a lot recently about how AI is shifting from a simple analytical tool to an active agent in this process.

Moving Beyond Simple Data Aggregation

Traditionally, we've used technology to aggregate data. We scrape databases, we pull reports, and then we put a junior analyst in front of an Excel sheet to make sense of it.

I believe the real shift we're seeing now is that AI agents can actually synthesize this information. Instead of just giving you a list of companies with revenue between $10M and $50M, an AI agent can reason: "This company fits your thesis because they just hired a new CTO, their patent filings align with your portfolio's tech stack, and they are likely facing margin pressure that makes them open to a buyout."

The "Active" Sourcing Model

I think the future is what I call "Active Sourcing." It’s not about waiting for a pitch deck. It’s about having an always-on system that is monitoring the heartbeat of the market 24/7.

Imagine an agent that:

  1. Monitors Talent Flows: Notices when key engineers leave a competitor to join a startup.
  2. Analyzes Sentiment: Reads between the lines of earnings calls or press releases to detect distress or pivot points.
  3. Predicts Readiness: Uses historical patterns to predict when a founder might be ready to sell, months before they hire a banker.

Why This Matters for the Human Element

Some people worry this replaces the network-driven nature of PE. I disagree. I think it supercharges it.

If I don't have to spend 80% of my time filtering through noise, I can spend 100% of my time building relationships with the founders who actually matter. The AI doesn't close the deal - it just makes sure I'm in the room with the right people at the right time.

This is where I see the industry going in 2026 and beyond. The firms that treat AI as just another database will fall behind the ones that treat it as a digital analyst partner.