TLDR: FTI Consulting’s 2025 Private Equity Value Creation Index reveals a significant shift in strategic priorities, with Artificial Intelligence emerging as the top focus for private equity firms. This comes as traditional M&A activities are deprioritized, emphasizing AI’s growing importance in enhancing portfolio company value and exit readiness.
FTI Consulting, a global business advisory firm, has released its 2025 Private Equity Value Creation Index, signaling a notable evolution in how private equity firms approach value creation. The index indicates a clear shift away from mergers and acquisitions (M&A) as a primary lever, with only 9% of global private equity leaders identifying it as their top priority for 2025. Instead, Artificial Intelligence (AI) has ascended to the forefront, recognized as the leading strategic priority and a critical factor for ensuring portfolio companies are exit-ready.
Jiva J. Jagtap, Global Leader of Private Equity at FTI Consulting, commented on the current market dynamics, stating, ‘Cost has become the dominant conversation. In a high-uncertainty, low-growth market, cost is often the most immediate lever for protecting value. But cost alone doesn’t deliver returns.’ This perspective underscores the need for more sophisticated strategies, where AI plays a pivotal role in driving long-term value beyond mere cost reduction.
Despite AI’s recognized importance, the report also highlights that it remains one of the least frequently utilized and most challenging levers to implement. This suggests a gap between awareness of AI’s potential and its practical application within private equity strategies. FTI Consulting’s own capabilities in data analytics and cybersecurity position it to offer AI-enhanced advisory services, which could be a significant differentiator in the competitive consulting market.
Furthermore, FTI Consulting’s strategic moves, such as the appointment of Pat McLay to lead its Australian expansion, align with the broader trend of leveraging expertise in digital transformation and ESG (Environmental, Social, and Governance) to meet surging market demand. The firm’s global scale, with $3.7 billion in FY2024 revenue and 7,900 employees across 32 countries, provides a robust foundation for delivering high-value services in an evolving consulting landscape.
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In summary, FTI Consulting’s latest findings underscore a transformative period for private equity, where AI is no longer a futuristic concept but a present-day imperative for value creation and competitive advantage. The challenge now lies in effectively integrating AI strategies to unlock their full potential.
