Private equity bosses warn of AI threat to bets on law and accountancy

1. 1. Top private capital executives have warned that law and accountancy are among the businesses most vulnerable to disruption by artificial intelligence.
2. 2. Executives at the SuperReturn conference in Berlin anticipate substantial pressure on professional services due to AI, echoing sentiments from major investors.
3. 3. Shares in Accenture, the world's largest listed consultancy, have fallen by nearly half, indicating investors' fears about AI's impact on professional services.
4. 4. Private capital groups are increasingly shunning new investments in certain professional services firms due to uncertainty over their long-term revenues and valuations.
5. 5. Investors differentiate between professional services, viewing unregulated sectors as more exposed to AI disruption compared to regulated ones like audit work.
6. 6. The AI-driven disruption of professional services threatens to dent returns for private equity firms that have invested billions in the sector.
7. 7. Executives are now focusing on sectors like industrials, which are considered a "halo trade" due to significant assets and low risk of technological obsolescence.
8. 8. Some buyout executives believe that accounting groups which effectively deploy AI and adapt their revenue models could ultimately benefit from the changes.