From Risk to Readiness: Grounded Approaches to AI in the Private Markets 

By: Laura Sankowich

Allvue Marketing Thought Leadership and PR

August 18, 2025

AI’s Growing Role in the Private Capital Markets

Artificial Intelligence (AI) is rapidly transforming the private capital markets by enhancing operational efficiency, decision-making capabilities, and risk management. Despite its potential, many executives remain apprehensive about embracing AI due to data security concerns. However, pragmatic cybersecurity principles, outlined by Allvue’s Chief Information Security Officer Frank Vesce in The Pragmatic CISO, provide practical tips for integrating AI securely and effectively. 

Data Security as the Cornerstone of AI Adoption

According to Vesce, central to pragmatic cybersecurity is recognizing that data protection remains paramount, irrespective of the technology applied. For firms in private capital markets data including investor information, intellectual property, and transaction details represent their most critical asset. Pragmatic approaches to AI and security incorporate clear identification of what constitutes vital data, followed by a prioritized, strategic approach to protection. 

Applying Foundational Cybersecurity Principles to AI

Foundational cybersecurity principles like asset management, Multi-Factor Authentication (MFA), and Endpoint Detection and Response (EDR) seamlessly translate to AI-driven contexts. AI governance should begin by ensuring these fundamental controls are robustly implemented. Regular tabletop exercises and scenario testing involving AI-related security incidents further reinforce preparedness and responsiveness. 

Strengthening AI Governance Through Testing and Preparedness

In private capital markets, data breaches or misuse of sensitive investor data can lead to significant financial and reputational damage. Pragmatic cybersecurity underscores the importance of embedding cybersecurity considerations into business strategy discussions and aligning AI security initiatives closely with business goals. CISOs should advocate for transparency, structured governance, and ongoing staff education to ensure successful AI adoption. 

Building Confidence in AI Through Pragmatic Cybersecurity

Ultimately, firms in the private capital markets should approach AI with confidence rather than fear, backed by pragmatic cybersecurity strategies that emphasize clear planning, consistent implementation, and continuous monitoring. 

Learn more about Allvue’s agentic AI solutions for the private capital markets here.