In nearly every PE engagement I step into, the same question comes up: “How should we be using AI correctly for real value creation?”
LPs and buyers alike are pressing portfolio companies for a clear, credible answer. And they should. Capital is currently more expensive, exits take longer and leveraging new innovation has never been easier; so financial engineering alone won’t cut it. PE Firms’ Operations Portfolio teams know that value creation now depends on how quickly a company can modernize, scale, and prove its resilience. AI has become one of the most powerful levers for achieving this, and it demands measurable, high-impact execution to create real value.
But here’s the catch: most portfolio companies don’t know where to start.
20% of Portcos Can’t be Wrong: Why AI Matters for PE Right Now
Artificial intelligence isn’t about flashy demos or “AI theater”: some tools are just a thin layer over a publicly available LLM. When done right, AI growth levers drive EBITDA improvement and future-proof a business for an exit. The early signs point to this: Research shows 20% of PE portfolio companies have operationalized AI use cases and are seeing measurable ROI. The opportunities are real:
- Efficiency – Automating manual processes reduces costs and accelerates workflows.
- Customer Experience – AI-powered personalization and support boost satisfaction and increase retention rates.
- Growth – Smarter prospecting, marketing automation, and predictive analytics drive top-line revenue with lower costs.
When AI is treated as a tool in service of strategy, not the strategy itself, value creation follows. Leading PE Firms are already showing what good looks like. Vista Equity believes AI will redefine the “Rule of 40,” targeting 50–60% growth-plus-margin performance. Apollo built a Center of Excellence to share playbooks and accelerate portfolio-wide adoption, while Hg is using AI to modernize legacy code and boost workforce efficiency.
The Common Pitfalls
Too often, I see firms fall into these traps:
- Chasing shiny objects without a business case and success criteria.
- Ignoring integration with existing workflows leaves AI projects stranded.
- Lacking talent to operationalize and sustain the investment.
- Missing a change management focus as a top priority. People always ask, “Who moved my cheese?”
The result? Wasted time, wasted spend, and a skeptical Board.
A Practical Playbook for AI in Portcos
At Chameleon Collective, we take a pragmatic, operator’s view. AI should be tied directly to business outcomes. Here’s a framework I commonly use with clients:
- Assess Readiness – Audit data, systems, and organizational appetite for AI.
- Identify Quick Wins – Start with automating sales operations, marketing workflows, or customer support.
- Build for Scale – Expand into customer journey personalization and AI-driven demand generation.
- Operationalize – Upskill teams, embed AI into GTM workflows, and measure ROI relentlessly. Insist on scorecards to show the Board how the company is holding itself accountable.
A Real-World Example
Currently, I’m working with a PE-backed SaaS compliance company that targets SMBs on this exact journey. We started with a readiness assessment, then layered in automation around sales prospecting and marketing workflows. The impact has been immediate: less manual effort for the team, more precision in how they target prospects, and a faster sales cycle. This transformation is tied directly to growth metrics
The Investor’s Viewpoint
Buyers and boards don’t just want to hear that a portfolio company is “doing AI.” They want evidence that AI is embedded in operations and delivering measurable outcomes. The companies that can show this will be positioned for premium valuations when it’s time to exit.
Final Thought
Every portfolio company will be asked about its AI strategy. The firms that provide specific answers, including clear wins, operational discipline, and a roadmap for scale, will differentiate themselves in the market.
At Chameleon Collective, our Tech & AI practice helps PE firms and their portfolio companies turn AI from a buzzword into a value creation engine.
If you’re an operating partner or PE exec looking to unlock portfolio value with AI, let’s talk.
