Last week I moderated a panel at LPGP Connect CFO/COO Conference in London on back- and middle-office operations, with three operations leaders from private capital firms at different growth stages and fund strategies. Five things stuck with me:
1. Growth outruns the systems built for it
When you add a new fund and expand your LP base into new jurisdictions, it multiplies your back-office complexity. Reporting requirements don't scale in a straight line; the stress and errors can compound quickly. Private credit, in particular, can be significantly complex: bespoke deal structures don't fit off-the-shelf platforms, so the fix isn't hiring more people; it's hiring people who can build the workaround the software can't provide.
2. AI moves the workload; it doesn't remove it
Structured trials using AI in real-life use cases are underway, with growing use of Claude in particular. But the time spent on oversight has increased, not decreased. Reviewing AI-generated output now takes more senior time than reviewing an analyst's work did, with governance layers still being built underneath it. Token-based pricing is difficult to budget against, and legal discoverability doesn't disappear just because a draft came from a model rather than a person.
The clearest value shows up after data governance and internal coordination are sorted, starting with low-risk tasks like bank reconciliations and invoice processing before anything more ambitious. Straight-through processing remains the gold standard for any process that requires flawless accuracy.
3. Your LPs' automation is ahead of yours
LPs are scrutinizing the numbers they receive from their managers and admins like never before, largely because they have built their own downstream automations on top of GP reporting outputs. A changed column heading or restructured report breaks that process on their end. Format stability has moved from nice-to-have to a must.
The reporting cadence is under the same pressure. Private markets still operate on a 45–60-day reporting cycle, compared with near-real-time transparency in public markets. That gap is harder to defend each year, particularly as LPs see automation compress elsewhere in their portfolios, and it's already showing up in tighter reporting deadlines in side letters.
AI adds another layer of pressure. Once an LP has seen what modern tooling can generate elsewhere, "that's just how long it takes" no longer works as an answer. The one counterweight: a strengthening track record buys real leverage to push back on bespoke side-letter terms and to standardize what usually needs to be customized. That leverage isn't available to every firm yet, but it points to where this is heading.
4. Admin quality sets the pace
Better internal tooling doesn't fix a reporting problem if the underlying administrator relationship isn't built to support it. Inconsistent admin controls and workflows, like manual PCAP adjustments that never make it back to the general ledger, set a limit on what a firm can do internally, regardless of its own systems.
The fix isn't only switching providers. It's rewriting SLAs around quality metrics like error rates and oversight discipline, instead of turnaround time alone, and running selective NAV recalculations on high-risk areas to build independent confidence rather than taking an administrator's output on faith. This needs to be the new standard in the GP/admin relationship.
5. The hiring bar is moving
A background in accounting now functions as a baseline, not a differentiator. The recruitment screen is shifting toward candidates who've built a process or meaningfully used AI, because judgment, knowing when AI output is wrong, is the core skill needed, not the accounting credential. One open question: if AI becomes a shortcut before junior staff develop that judgment the traditional way, the gap doesn't close; it creates risk in the workflow and the output.
The pattern underneath it all
The system that fits your fund today gets overrun by the next growth wave, the next jurisdiction, or the next LP who wants accuracy to the basis point. The firms that stay ahead aren't the ones with the most people. They're the ones who build capacity before they need it.