Private Equity Leveraging Technology/MSP and AI for Strategic Advantage

In Bain’s Global Private Equity Report 2025 they highlighted, “deal making has turned the corner”. However the deal flow and market is cautious and although valuations have increased, firms and portfolio companies are turning to operational improvements under an inventory of unsold companies. Leveraging an MSP and AI across the portfolio uncovers significant advantages.

Although uncertainty and instability in the markets and economy can cause slower deal flow and make investors take a pause, there are opportunities to gain efficiencies and improve your intelligence gathering through technology arbitrage and AI agents. This is why firms are looking at technology arbitrage to improve operations and better protect their portfolio for the storms ahead. This approach also increases visibility across the portfolio and quickly assess situations along with predictive analytics.

The private equity industry and its portfolio companies are facing some significant challenges in this new emerging economy. Some of these include:

• Inefficiencies across the portfolio

• Speed of gathering data and business intelligence

• Rising risk of cyber security threats

• Higher technology costs

• Retention of talent

Technology arbitrage is more than outsourcing to a Managed Services Provider (“MSP”). It combines the services of an MSP with the strategic and leading business intelligence deploying AI with the expertise of a professional services firm. In addition, being located domestically in a stable work environment and operating with advanced security protocols is the minimum bar to cross. Traditional MSPs are used for day-to-day IT support and typically outsourced internationally to call centers. This lowers the cost of support but often lacks the quality of service, leads to higher response times, inefficiencies, exposes the organization to greater global security risks and lacks the professional business intelligence with AI to advise the PE firm and portfolio companies.

Traditional outsourcing to an MSP can potentially yield a 12-16% operational cost savings.  However, creating a Private Equity technology arbitrage model can yield a 20-34% cost benefit to the overall network and creates an AI network for analytics.

Using a technology arbitrage model across the portfolio provides the following benefits:

• Overall lower cost model (20-34%) and near zero for PE firm operations

• Rapid deployment of resources to support operations, due diligence and portfolio projects and post-acquisition integrations

• Consistent data security and cyber protection across the portfolio

• Stronger business continuity plans

• Increased speed and access to data and intelligence for decision support

• Rapidly deploy resources for critical needs or to support new deal flow

• Continuity and stability of supporting labor

Often firms rely upon a pool of independent professionals including law firms, consulting, recruiting, operational specialists, etc. and leave technology decisions up to the portfolio companies. However, a full technology arbitrage approach can be better achieved across the portfolio with greater results by combining the services of an MSP with that of technology professionals to implement and deploy better solutions. Learn how Skolnik, a PE portfolio company and industrial packaging manufacturer, has leverage technology arbitrage in this video link. This model creates a more effective and efficient organization to be stronger through more challenging times.

To learn more about Sagin’s Private Equity technology arbitrage model, visit us at www.saginllc.com or email info@saginllc.com.