Buy, Build, or Wait: AI Adoption Resolutions in European Private Equity

Sammanfattning

This thesis examines how organizational configurations within European private equity (PE) funds produce different artificial intelligence (AI) adoption resolutions under competitive pressure and limited partner (LP) scrutiny. Existing research on PE and digital adoption operates at the portfolio-company level and treats the fund as a homogeneous driver, leaving the question of how funds themselves organize AI capabilities in investment analysis largely unexamined. The thesis shifts the unit of analysis from the portfolio company to the fund itself and from quantitative outcome measurement to substantive organizational mechanisms. Following a stringent data-driven mandate, semi-structured expert interviews were conducted with eleven European PE Funds and analyzed through grounded-theory-inspired cross-case coding, with practical saturation in code emergence confirmed within the sample. Wide variation in operational AI adoption maturity is documented across the eleven Funds. The variation in AI maturity does not track ticket size, geography, sector focus, LP profile, or interviewee seniority. What explains it is configuration variance: operationally-mandated AI personnel as the primary feature, with bottom-up AI initiative and active-governance signature as amplifier features. Funds' AI-adoption decisions map onto the configuration variance and resolve along three characteristic lines: build-resolution, articulating-without-operationalizing, and foundational-deferral. These are resolutions Funds occupy rather than exclusive types, navigated dimension-by-dimension across functional areas in Funds' investment workflows. The configuration-variance framework and the resulting AI-adoption resolutions are read through the resource-based view, real options under Knightian uncertainty, institutional theory, and the relational view, examining how the resolutions Funds occupy relate to differential exposure across competitive capability, customer relationship, and human capital, with value chain taken up as a fourth dimension through forward projection.