Welcome to this week’s edition of Testing the Thesis!
This week, I take a closer look at the impact of artificial intelligence on the careers of junior professionals in the private markets industry.
Before we get started, here is a brief round-up of some private markets related news that I found interesting:
European Commission and EIB Group launch Institutional Investors Pact to boost investment in tech scale-ups (link): personally, I do feel that strengthening the venture capital and growth equity markets in Europe is a noble aim and could unlock a lot of value creation. I am, however, a little unsure whether more public sector involvement is the solution – a topic to explore in more detail in a future newsletter, perhaps.
US housing crunch puts private equity in midterm campaign crosshairs (link, article behind paywall): as per usual, the article uses a pretty broad definition of “private equity”, but highlights an important issue – as private capital spreads into different parts of the economy and becomes more visible to the public, it also becomes an easy scapegoat for politicians (though some criticism may, of course, be warranted). The piece focuses on residential homes, but data centres and care infrastructure are also politically vulnerable.
Will junior investment professionals be automated away by AI?
Entry level roles in the investment industry typically include a lot of “grunt work” – information processing tasks such as drafting memos, building Excel spreadsheets and putting together PowerPoint presentations.
In other words, precisely the sort of work that AI is most useful for.
This raises a few important questions.
Firstly: will AI eradicate the need for junior investment and banking professionals?
I am relatively comfortable saying that I don’t think it will, not for a very long time at least. As Robert Buckland put in his FT article on the topic a year ago: “right now, AI is better suited to being a research assistant than a research analyst”. This accords well with my own observations and the conversations I have had with others in the industry: the same workload can now be handled by fewer staff, who work more efficiently by incorporating AI into their workflows. So fewer juniors professionals are required, but they still own the process. The adjustment should be gradual. Less likely that vast numbers of analysts are cut in AI-powered efficiency drives, but rather that companies are thinking twice before replacing junior staff who have left or moved up.
Slowly, this shift is becoming observable in hiring figures (see, for example here or here), yet it is too early to state definitively that AI has caused a decline in junior hiring. Indeed, some have pushed back against the narrative: this includes financial services recruitment firm Dartmouth Partners, who state in their H1 2026 report: “AI will undoubtedly reshape junior roles and the skills required to succeed. Notably, however, the firms embracing AI most aggressively are often the same ones continuing to invest heavily in early careers talent”.
This brings us neatly to the second, equally important question:
Has the skillset required for success in the investment industry changed?
It is tempting to think that “hard skills” such as financial modelling or coding will play a smaller role in junior hiring going forward. As AI lowers the technical proficiency necessary to perform routine tasks, the relative value of soft skills rises. One example that underlines this idea nicely came when Robert Goldstein, BlackRock’s COO, told Fortune that he wanted to hire more liberal arts graduates that “have nothing to do with finance or technology”.
But this is only half the story. Yes, in many roles the hurdle of technical proficiency has been lowered, but in others analysts are now not just required to build models themselves, but also have to understand how their AI tools do this and how to find and correct any errors, inaccuracies or aesthetic issues. For these roles, the level of technical skills required to excel may have gone up rather than down. As such, I would certainly not recommend a would-be analyst focus less on these skills.
The critical change is that junior professionals are now expected to be proficient in using AI, as some firms have made clear publicly (see UBS, for example). Boomers and Millennials will assume that their digital native colleagues know how to wield the new power of technology effectively, even if they have just left educational institutions forbidding them from doing so. The reward for junior professionals may be more interesting work that emphasizes critical review and analysis more than pure execution.
Some additional thoughts.
When we talk about hiring trends in the private markets space in particular, we must remember the truly exceptional growth that the industry has seen in the last decade.[1] This should naturally create more roles in the industry - good news for those looking to join it.
The nature of roles available in private markets has also become more diverse. For example: more roles at large institutional investors as they create and build out in-house functions; more entry-level roles at fund managers who have reached a size where they can train internally rather than sourcing talent from investment banks; or those bringing private markets to the retail / wealth investment market.
The increased variety of functions within private markets careers is also relevant when considering the impact of AI. For each function, the best method for incorporating AI will look different and in many cases it has not yet been found. Change is happening now, giving young professionals a rare opportunity to contribute and to have a real impact early in their corporate lives – for those able to grasp it, the AI revolution could significantly boost to their careers.
TL/DR summary
AI is making junior professionals more efficient: a decline in junior hiring seems likely.
While AI may commoditise basic hard skills, those wishing to join the industry would be well-advised to lean in on technical abilities.
The growth of private markets has created a broad array of roles in which AI incorporation is an ongoing project. Young professionals should see this as an opportunity.
[1] Assets under management across PE, Infrastructure and Private Credit have more than trebled from just under USD 4.5tn in December 2015 to more than USD 16.5tn as at December 2025 (Preqin, September 2026).