Private Market Valuations Strain as Fund AI Use Surges

TL;DR: Deloitte's survey of 95 fund groups, released October 8, 2026, says 77% are using more artificial intelligence (AI) and 40% of those apply it to fair valuation. Yet only 4% run a full valuation update daily, and 39% do it quarterly. If you hold private assets in a registered fund, your daily price mostly reflects refreshed market inputs. InvestmentNews reported the survey was conducted in summer 2026.

I read the survey as a story about speed outrunning judgment. In my Navy quality assurance work, nothing was signed off until someone other than the person who did the job had verified it. Valuation deserves the same test. If you hold a private equity (PE) or private credit sleeve inside a registered fund, the number on your statement comes out of this process.

How much private equity do these funds hold now?

More than they used to. According to Deloitte, private equity exposure rose to 51% of participating fund groups and private credit stands at 33%. Of the groups that hold private equity, 46% reported more positions over the past 12 months, up from 26% in 2025. InvestmentNews adds that nearly 60% of participants recently launched an alternative fund product, and 55% of those named projected future growth and marketing advantage as their primary rationale.

I read that as demand pulling products onto the shelf, which hands valuation teams private holdings faster than their processes were built for. It is also the argument I keep making: democratized private markets can hurt retail investors when marketing runs ahead of the marks.

How often are private holdings really revalued?

Less often than a daily price suggests. Per Deloitte, 48% of fund groups refresh fair values daily using observable market inputs, but just 4% perform a full update that revisits unobservable inputs, cash flow assumptions and methodology. The largest group, 39%, does that full update quarterly.

Valuation step	Share of fund groups
Daily refresh using observable inputs	48%
Full daily update of unobservable inputs and methodology	4%
Full update quarterly	39%
Private credit priced by a third-party spot price or range	69%

Source for all four rows: Deloitte. A daily price on a private asset is mostly a market-input adjustment. The judgment about what the underlying company or loan is worth gets revisited far less often. Downside first means asking which kind of update you are looking at.

Where does AI fit into valuation?

It is moving quickly. Deloitte reports that 77% of participants began using or increased their use of AI over the past year, and that among AI users 40% apply it to fair valuation. Financial reporting and investor communications (33%) and fund accounting operations (31%) follow.

Deloitte's survey commentary calls for "disciplined governance, independent challenge, and human-led oversight" alongside AI and daily pricing. I would put it more bluntly. A faster tool still needs a person who can say the input is wrong. Verify before you trust.

Is anyone checking the AI governance?

The evidence is thin. In its 2026 AI Impact Survey, Grant Thornton found that just 9% of private equity firms are confident they could pass an independent audit of their AI governance within 90 days, against 22% across all industries. That survey covers PE firms, not the fund groups Deloitte polled, so I would not stack the two numbers. Both point the same way.

Why does the AI question touch valuation at all?

Because AI is also changing what the assets are worth. Withum notes that about a quarter of private credit, roughly $112 billion, sits in software and technology. It cites Octus data showing fewer than 6% of software loans in business development company (BDC) portfolios were marked below 90 cents on the dollar as of September 30, 2025.

If AI disrupts those software businesses faster than marks move, the price on your statement lags the facts. I covered the broader picture in our private credit market analysis, and the structure in our BDC explainer.

What should you watch next?

I am watching for two things. The Securities and Exchange Commission (SEC) has already put private credit in its sights, as we covered earlier this year, so pressure on pricing methodology may continue. Fund groups may also move more of the full-judgment work from quarterly toward something faster, though the survey does not say they will.

One caution on the data. The figures are what fund groups told Deloitte, and I have not seen the underlying questionnaire. Treat them as self-reported practice, not audited fact.

Common mistakes

The first mistake is reading a daily net asset value (NAV) as a daily valuation of the private assets inside it. Most of that refresh uses observable inputs, so the hard judgment may be three months old.

The second is assuming AI in the valuation chain means a better number. Deloitte ties it to human oversight, and nothing in the survey shows AI lowered error rates. The third is skipping the marks on software-heavy credit funds because they look stable. Stable marks and stable value are different things, as our look at rapid private valuation step-ups shows on the equity side.

FAQ

How are private market assets valued?

Fund groups estimate fair value from observable market inputs and from judgments about cash flows and methodology. Deloitte found 48% refresh values daily on observable inputs, while only 4% fully revisit the unobservable assumptions daily. Most do that quarterly.

Does AI set the price of my private fund holdings?

Not on its own, based on the survey. Deloitte found 40% of AI-using fund groups apply it to fair valuation, and it recommends human-led oversight and independent challenge alongside it.

What share of funds hold private equity now?

Deloitte reports 51% of participating fund groups invest in private equity and 33% hold private credit. InvestmentNews notes the private credit figure remains well above the 21% reported in 2023.

Are private credit prices independent?

Often partly. Deloitte says 69% of fund groups get a spot price or range of prices for private credit from a third-party provider, up from 66% in 2025.

The bottom line

A daily price tells you how fast a number moves, not how recently anyone verified it. I would trust a quarterly mark with a named challenger over a daily one nobody questions.

What to do today

Open the latest shareholder report for any registered fund where you hold private assets and find the valuation policy. Look for how often the full valuation is revisited and who challenges it. If the answer isn't in the documents, ask the fund's investor relations line to tell you in writing. If you want more reads like this on the numbers behind private funds, the free AIN briefing is where I send them.

Educational content only. Not investment, tax, or legal advice. Not an offer or solicitation to buy or sell securities. Past performance does not guarantee future results. Private-market investments are illiquid and involve risk of loss, including total loss of capital. Consult qualified advisers. Angel Investors Network is not a broker-dealer or investment adviser.