AI: questioning universal value creation

Investors continue to see wide performance gaps between winners and losers in AI, across private portfolios as well as public markets. Against a volatile macroeconomic backdrop, traditional headline benchmarks on portfolios are less reliable as the primary valuation reference: everyone claims AI as a source of genuine GP value-creation capability. While historically, value creation was sought via digitalisation or operational efficiency, AI collapses that separation – the technology is the operational change.

The real differentiators that LPs will now look for at asset level are genuine capability: where has AI adoption improved a process, versus where has it made that process unnecessary. And applied beyond the asset, which business models are not systemically exposed to AI potential disruption.

Succession is the new liquidity

This year, liquidity no longer appears to be LPs’ primary concern. Instead, the word on everyone’s lips is succession.

Our team heard LPs express concern about manager succession in the current environment of increased GP M&A and GP stakes transactions, as talented and ambitious younger partners – who might otherwise have been the next generation of leadership – leave for pastures new. While LPs see the possibility for spin-outs and new sources of alpha in these departures, there is also some frustration directed at established managers due to perceived interruptions to continuity and, potentially, performance. This is even seen by some LPs as the largest material risk for the industry.

2025 marked a step-change in GP-level M&A across private markets, with transaction volumes up 40% and reaching record levels. This shows no sign of slowing in 2026. Successful outcomes consistently hinge on alignment and talent retention, while long-dated equity, earn-outs, and ownership-style incentives are now foundational features of GP transactions, reflecting a market where securing people, platforms, and long-term continuity is as important as acquiring assets under management. Given the feedback from LPs on the ground, GPs considering a transaction need to focus plans for succession and how the most talented partners and directors will be retained.

Differences from SuperReturn

While the largest international GPs — particularly those whose senior leadership and managing partners travel to Europe only infrequently — prioritise SuperReturn, GPs that find they can be lost in the noise and scale of SuperReturn are able to have productive conversations with LPs in Paris. However, it was noted that GCC LPs were conspicuously absent, while US private equity managers are growing in numbers.

Separately, there was continued evidence of allocations shifting into the middle market, with one LP launching a new subsidiary purely for smaller-scale commitments that have previously sat outside their core scope.

Secondaries: underwriting in the spotlight

Annabelle Judd, Partner, chaired the conference’s Secondaries Summit. Participants discussed the current status of the secondary market, the rise of specialisation, the need for alignment and the importance of well-run, transparent processes to avoid any pricing conflict on continuation fund transactions.

Our key readout from IPEM was that investor scrutiny remains high. Managers able to demonstrate genuine AI capability, secure their next generation of leadership and maintain disciplined underwriting will be best placed to deliver the incremental alpha LPs increasingly seek.