In Dynamo’s most recent global survey of ALTs investors about their AI plans, not one respondent dismissed the importance of AI. With each annual Dynamo survey, more alternative investment firms report that AI is essential for staying competitive, and they are actively integrating it into their investment workflows.
Clearly, the interest in AI is strong. The real question is, are ALTs firms actually ready for it?
Many are discovering that AI readiness and AI enthusiasm are not the same thing.
The Gap Between AI Ambition and AI Readiness
Across private equity, venture capital, private credit, real estate, and hedge funds, firms are avidly evaluating AI use cases that include deal sourcing, due diligence, portfolio monitoring, investor communications, and operational automation.
Yet, Dynamo’s research has highlighted a key obstacle. For the past two years, investors have said data quality and availability are a top challenge in implementing AI.
 “AI can accelerate, automate, and illuminate—but only when it’s built on the right data foundation.” — Donna Parent, CMO |
More than cost, technical expertise, or integrating with their existing systems, data issues are what stands in the way of meaningful AI results.
This creates a common and costly scenario. Firms invest in AI tools before determining whether their data and systems are ready for it. And this is leading to disappointing results. Unfortunately, poor data can’t become valuable just because AI is applied to it.
In the worst case, AI will just create subpar outputs faster.
The first question ALTs firms really need to ask isn’t “How can we use AI?,” but, “How can we get ready for it?”
Measuring AI Readiness: Get Your Score
Many firms may believe they are ready for AI because they have a CRM to manage data, or they have piloted a few AI projects already. True readiness is actually more than a technology question.
To help firms evaluate their preparedness more objectively, Dynamo recently developed an AI Readiness Assessment, a 13-question evaluation designed to quickly provide a readiness score in about three minutes.
The assessment looks at four dimensions that together, determine whether AI initiatives are likely to succeed. Here’s what it examines.
Is the underlying investment data clean, structured, centralized, and accessible?
This is an essential question because it directly influences every AI outcome. Firms with disconnected systems and inconsistent data governance will struggle to generate reliable insights regardless of which AI tools they deploy.
Do existing systems support AI-enabled workflows today?
This evaluates whether firms have the operational infrastructure necessary to integrate AI seamlessly into daily activities, and not just for one-off purposes.
Are people and processes prepared to use AI effectively?
User adoption frequently determines whether AI initiatives actually succeed. This requires clear workflows, training, and team alignment around how AI-generated insights will be used.
Is there a defined vision for AI adoption?
Organizations with a clear roadmap tend to prioritize technology investments more effectively and avoid accumulating point solutions that ultimately fail to create lasting advantages.
What Your Score Might Tell You
The value of AI readiness assessments isn’t the score itself. It’s understanding where gaps exist before they become significant obstacles.
Here is where a firm can glean critical insights if the AI readiness score comes back low in any of these key areas.
Low Data Foundation scores often indicate a need for consolidation and standardization. AI systems depend on structured, trustworthy information. If data is spread across multiple applications and managed manually, AI initiatives will struggle to deliver meaningful outcomes.
Low Tooling & Infrastructure scores reveal potential integration challenges. AI delivers the greatest value when it’s connected to the systems investment professionals already use for relationship management, deal tracking, investor communications, portfolio monitoring, and reporting.
Low Team & Adoption scores suggest that change management may become a primary challenge. The most sophisticated AI capabilities can only generate limited value if teams don’t incorporate them into existing workflows.
Low Strategy & Urgency scores often indicate there isn’t a defined AI vision. Here, firms may pursue isolated projects that produce incremental gains but don’t create a larger performance edge.
AI Readiness Means Better Execution
AI is no longer an emerging trend for ALTs investors to experiment with. More ALTs firms are adopting AI and have access to similar technologies, and this is smoothing the curve for competitive advantages. What is really separating leaders is the ability to execute well.
AI readiness builds the solid foundation for powerful results through strong data management, connected workflows, integrated systems, and organizational alignment. Then, it can become a core component of how firms source opportunities, manage portfolios, and serve investors.
Firms that skip the foundational create more risk than value. Understanding whether your firm is ready to make AI successful may be the most important step in the AI journey.
Find Out if Your Firm is Ready for AI
Frequently Asked Questions (FAQ)
AI is increasingly viewed as critical for maintaining competitiveness, with firms actively incorporating AI into investment and operational processes. As adoption accelerates, firms with strong AI readiness are better positioned to capture the technology’s full potential.
Dynamo helps firms connect data, investment processes, and workflows across the organization, creating an environment where AI can surface insights, automate tasks, and improve productivity across the investment lifecycle.
AI systems depend on accurate and well-structured data to deliver valuable results. Poor-quality data can lead to inaccurate recommendations, flawed analysis, and inefficient decision-making. As Dynamo notes, AI can only be effective when built on the right data foundation.
Dynamo provides a centralized platform that helps firms organize investment data, streamline workflows, improve data accessibility, and establish the foundation necessary for successful AI adoption. This enables firms to generate more accurate insights and achieve better AI outcomes.
According to Dynamo’s research, many firms are enthusiastic about AI but continue to struggle with data quality and data availability. Inconsistent, fragmented, or inaccessible data can prevent AI tools from delivering reliable insights and meaningful business value.
AI readiness refers to an organization’s ability to successfully implement and scale AI initiatives through clean, structured, accessible data, modern technology infrastructure, effective workflows, and strong governance practices. Simply adopting AI tools does not guarantee success if the underlying foundation is not in place.
Donna Parent is the Chief Marketing Officer (CMO) at Dynamo Software. Donna is responsible for the corporate brand, demand generation strategies, and go-to-market initiatives for promoting Dynamo’s end-to-end cloud-based platform to the alternatives ecosystem. She is focused on fueling lifelong relationships with consumers, businesses, and strategic partners. Connect with Donna on LinkedIn.
