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            Portfolio Insights

            Private Equity selection in the age of AI

            TJ
            Tyler Jayroe

            Managing Director

            MG
            Meena Gandhi

            Head of Business Development and Investor Relations for PEG

            Published: 10/08/2026
            Private Equity selection in the age of AI

            In brief:

            • Private equity (PE) performance is increasingly shaped by the portfolio manager and asset selection, as wider dispersion and rapid technological change increase the importance of disciplined underwriting and operational execution.
            • J.P. Morgan’s Private Equity Group (PEG) brings 45+ years  of experience, a deeply tenured team that has worked together over various market cycles, and a consistent focus on the small- and middle-market , where active ownership can matter most.
            • We showcase an example of PEG’s approach in practice: backing businesses that benefit from durable growth trends, operational improvement, and the use of technology, including artificial intelligence (AI), to create value beyond the initial investment.

            In PE, the best outcomes rarely come from chasing the latest trade or reacting to short-term market trends. They come from applying a disciplined process consistently over time. That is the foundation of PEG, which has been investing in private equity for more than 45 years1. With deep institutional experience and an average senior team tenure of 24 years 1, PEG applies a disciplined, bottom-up approach across cycles. PEG focuses on the small- and middle-market2—an area where access, underwriting discipline and fundamental value creation have a meaningful impact on returns. We believe this part of the market may present greater opportunities for operational improvement, lower reliance on leverage, and a broader set of exit paths.

            This approach is especially relevant today as software and other sectors are being revolutionised by technological innovation, particularly AI. PE is often characterised by wide dispersion in investment outcomes, but AI is raising the stakes, making portfolio manager and asset selection even more important. The question is no longer simply whether to invest in PE, but how to identify portfolio managers who seek to develop and execute resilient value creation plans and generate liquidity after the investment is made. PEG has long focused on partnering with sector specialists who underwrite conservatively, work closely with management teams, and build better businesses over time rather than rely on financial engineering. That emphasis on value creation is reflected in PEG’s evergreen approach, where most gains have been generated after closing.3

            Operational value creation is particularly important in the small- and middle-market, where many businesses are receiving their first institutional capital and still have meaningful room for growth and improvement. The opportunity ranges from professionalising management teams and expanding into new geographies to improving systems, pricing, and go-to-market execution. Increasingly, it also includes implementing AI to gain efficiency across operations.

            AI’s relevance extends beyond the companies building the technology itself. It also lies in how portfolio companies apply AI to improve workflows, sharpen decision-making, and increase productivity. For many businesses, AI is increasingly becoming less a point of differentiation and more a core operating capability.

            One example is a US healthcare solutions provider4. PEG co-invested in the healthcare solutions provider alongside another US PE firm in April 2024. The company is one of the largest US providers of locum tenens staffing services, with specialties spanning radiology, anesthesiology, emergency medicine, psychiatry and surgery. Its leading market position reflects both scale and a differentiated service offering. In May 2026, the company launched an enterprise-grade workforce management platform powered by AI that helps hospitals plan, source, schedule, track and pay for temporary staff through a single system instead of managing multiple staffing agencies and spreadsheets. The company’s revenue and EBITDA have grown rapidly over the past two years, with outperformance driven by management’s core state strategy and a redefined production model that has increased the number of days booked. This illustrates how AI can strengthen operational efficiency and support more effective business execution within portfolio companies.

            Beyond applications within portfolio companies, AI is also reshaping where investment opportunities may emerge. Some of the more attractive opportunities may lie in the “picks and shovels” businesses supplying the infrastructure, services and technical capabilities that support continued investment across the AI ecosystem. This is where middle-market specialists can often find attractive assets positioned to benefit from durable demand and operational execution, as AI continues to serve as a tailwind not only for large enterprises, but also for smaller businesses that can benefit meaningfully from its thoughtful application.

            In a market defined by greater dispersion, elevated expectations, and rapid innovation, experience and process matter.

            1Includes investing experience at both PEG and AT&T Investment Management Corporation (ATTIMCO). Senior portfolio managers (PM) average tenure represents managing directors. There can be no assurance that any or all of these professionals will remain with PEG, or that the past performance or success of any such professional serves as an indicator of his or her future performance or success.
            2Small and mid-market defined as companies with enterprise value <US$3 billion and funds with <US$5 billion in commitments.
            3Source: JPMAM PEG proprietary database. Includes all closed deals as of 31.03.2026.
            4Represents the largest co-investment exposure by NAV as of 30.04.2025. This example is included solely to illustrate strategies which have been utilised by PEG. It is expected that the portfolio will include a larger number of investments than the example set forth. There can be no guarantee or assurance that the portfolio will be able to make similar investments on similar terms in the future. Not all investments have had or will have similar results. The logos presented are registered trademarks of their respective companies. The inclusion of such companies should not be interpreted as a recommendation to buy or sell.
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