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CDD client here. Even with all the AI in the world, I haven't seen as many deals from up close as a partner at a good CDD shop
Thanks for the perspective
+1 to these comments - AI will just drive up volume of work needed in the same timeframe.
From what I’ve been told, 25-30 years ago - you spent an entire CDD timeframe doing just the market assessment. Timeframe hasn’t changed (if anything gotten shorter), but your scope has.
I think the AI content will populate many of the basic pages that used to require quite some work, but I think that people will just push harder on the tough questions that don’t exist off the shelf.
I see a bigger role for senior advisors who’ve run the businesses being invested in and markets of focus. Certain questions can only be answered through these folks.
Unrelatedly, there’s always the need for some 3rd party to eat 💩when the deal doesn’t go to plan
I am former oliver wyman private capital. One of our partners left to start a cdd software company and already has an enormous list of customers
One of the best things that AI will do is allow a client to do more diligence than they could in the past. If you make something more efficient, it just creates more demand for that thing.
So you'll start to see alot more availability of data across cdd and technology diligences and legal.
You dont realize just how much the pe firm does that the consultants aren't doing as well. There is more to outsource to consulting firms.
When something becomes more efficient it just becomes more in demand. Clients will want more of it and more diligence done.
AI is extremely powerful and can help with a lot of the CDD work. But there will always be a need for a real person to evaluate and provide discreet recommendations. Similar to everything else that has transformed with technology advances. The price for these services will likely decline (and the related cost will also decline) but the service/need will always be there.
Do you think it’s possible that firms just sell their data / past work to PE firms (blinded) and Pe firms use their agents, plus call bots and internal expertise instead of hiring CDD.
Yeah. I know what you mean. That makes sense. Maybe what they ask of tbr CDD is less market primer (unless it’s a very niche market). And becomes more VOC and growth analysis
The wont. Your partner will do CDDs by himself and charge the same rate.
I guess the demand will likely still be there. But the execution model will look completely different. Maybe half the number of people