Italian private equity firms are already using artificial intelligence (AI) to review investment opportunities and improve operations at portfolio companies, but wider access to the technology could make it harder for investors to stand apart, speakers said at the Mergermarket Italian M&A Forum in Milan last week.

Using AI is no longer a competitive advantage, while failing to use it is becoming a disadvantage, said Giovanni Russo, partner and head of Italy at Vidia Equity.

Vidia has around 30 professionals, including four focused on developing AI tools for the fund and its portfolio companies. The firm completed eight transactions and created three new platforms in 2026, which would have been difficult with the same team without AI, Russo said.

The firm also uses AI to review investment documents and produce an initial assessment. Its conclusions are usually in line with the investment team’s view in around 60%-70% of cases, while the team changes the assessment in the remaining 30%-40%, Russo said. Both a junior and a senior professional must still review each opportunity. They may decide that a company is more or less attractive than the system suggests, he added.

AI can reduce the time needed for an initial deal review from weeks to hours, said Giovanni Calia, managing director at Fortlane Partners. He cited Petra, an AI system developed by US private equity firm Ethos Capital to help assess investment opportunities. Still, funds using similar models and the same public information may end up identifying the same targets, Calia said.

Their own data, experience from completed and rejected deals, and relationships with business owners will be the distinguishing factor. “In the end, there is an entrepreneur who chooses you,” Calia said.

Fondo Italiano d’Investimento has spent more than a year bringing its internal information into a single system that can be used by AI tools, partner Federica Sallorenzo said. The firm has also just hired a chief technology officer to help introduce AI across the organisation.

Quadrivio Group, which works with Microsoft through its Artificial Intelligence PE Fund, first assesses whether a company has the right systems and skills to use AI, partner Fabio Boschi said. Quadrivio initially targets repetitive “no joy” work that employees would prefer not to perform, Boschi said. It has also applied AI to investor relations work, including responses to limited partners and capital calls.

The firm is more cautious when using AI to support investment decisions, as agents need complete information to avoid producing conclusions that could mislead the investment team, he said. AI can increase an organisation’s potential, but it can also make existing problems worse if the underlying processes are weak, he added.

Portfolio companies show measurable results

Vidia has developed an AI platform for a German group that refurbishes commercial and industrial roofs. Before its introduction, the four businesses within the dach energiezukunft (DEZ) group used different methods to prepare bids, ranging from paper and pen to Excel, Russo said. The tool finds relevant tenders and estimates the staff and equipment required, as well as the likely margin. It then uses the tender documents to prepare a bid. Work that previously took several days or up to a week can now be completed in about two hours, Russo said. The group’s pipeline has increased by around 30% as a result.

Fondo Italiano’s portfolio company Vetraco, which produces machinery for the cosmetics industry, uses computer vision to inspect each item at the end of the production line. The system provides immediate feedback to the machinery, helping the company reduce waste, Sallorenzo said.

Meanwhile Skynet Technology, which provides support to luxury retailers, uses live translation so store employees can speak in their own language with a human assistant, she added.

With around 2,600 companies held in private equity portfolios in Italy, funds must also consider how AI could affect the value of their underlying businesses, Calia said. This type of gains address efficiency, but investors must also ask whether AI threatens the value of the underlying business, Calia said. “The question is whether, in three years, that business will be worth zero or continue to be worth what it is today,” he said.

AI has already changed the appeal of sectors including software and professional services, Calia said. Industrial companies may become more attractive because AI can improve their productivity without removing the need for physical production, he added.

Investors should assess if management is prepared to change rather than count on projects that may simply add “AI washing” to a company’s equity story, Boschi said.

“We can accelerate that willingness and turn it into alpha, but the willingness has to be there, and it has to be strong,” he said.