Skip to navigationSkip to main contentSkip to right columnEmily LaiWed, June 24, 2026 at 1:46 PM GMT+2 5 min readAlmost every PE firm now claims to use AI, but Schroders Capital CIO Nils Rode thinks some are asking the wrong question about it.The firm, which has $112 billion AUM and is the private markets and alternative investment division of asset manager Schroders, published a white paper in May arguing that AI's highest-value contribution in PE will not come from cost savings or leaner teams, but from shifting the return distribution—finding more winners and avoiding more write-offs.Rode-Nils.jpgNils Rode, CIO of Schroders CapitalCourtesy of Schroders CapitalThe arithmetic behind that argument is stark. According to the paper, which draws on a global sample of buyout investments studied over more than three decades, roughly one in four buyout deals delivers a gross IRR above 50% over a typical four-year hold, while one in 10 returns nothing at all. In an asset class driven by outliers, a single missed winner or an avoidable impairment can have a material impact on the fund.Schroders Capital has developed three proprietary AI tools embedded in its investment process, including a GP screening tool called the Long/Short List, which surfaces managers matching patterns associated with historical outperformance across roughly 1,000 US and European buyout managers, alongside two AI agents, GAiiA and Vicky.PitchBook spoke with Rode about how those tools work, where the industry stands, and why he believes firms focused on cost reduction are missing the bigger picture.This interview has been edited for length and clarity.PitchBook: There is a lot of industry talk about AI driving efficiency. What do you think about AI's role in private equity?Nils Rode: We have a strong view there. We believe that these tools will much better use the available data, and they will lead to an explosion of analysis—good analysis—100 times more, and at the same time 100 times faster. So things that might have taken weeks you can do now within hours.It will be a bit like PowerPoint. When PowerPoint launched, it did not mean people did the same presentations at 10% of the cost, but they did hundreds of thousands of times more presentations.And so we believe the same will happen in our industry. It will lead to better investments.PitchBook: How specifically does AI help make better investments?Rode: If you just get one more great investment or you avoid one bad investment in a fund, that changes the performance of the fund. That has a huge impact on the performance for LPs and on the carried interest, and that impact is much higher than any cost saving that anybody could have.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info