How AI Is Giving Private Credit a Competitive Edge
Private credit managers are adopting AI at a rapid pace, and Brightwave is proud to be part of that momentum.
In a recent article from LevFin Insights, Founder and CEO of Brightwave, Mike Conover, discussed how AI is reshaping the way private credit firms identify risks, analyze deals and accelerate workflows. While traditional banks often face slower procurement cycles and higher compliance hurdles, private credit has the flexibility to move quickly. Early adopters are taking full advantage of this ability to experiment, spurred by uncertain macroeconomic conditions and a tight fundraising environment that are amplifying the need for a competitive edge.
“A lot more asset managers are getting off the sidelines,” Conover told LevFin Insights, pointing to a shift in mindset as AI proves its value in live deal environments. With early adopters reporting major efficiency gains, many firms are now taking action and starting to embed AI tools directly into their workflows.
Firms are now using AI to screen deals and perform due diligence that might otherwise go undone. One private credit firm reported cutting its initial screening process from five hours to five minutes using AI tools. Others are leveraging AI to analyze thousands of pages of documentation and surface known red flags in minutes.
Brightwave’s approach is designed to help credit teams move faster, ask better questions and reduce manual analysis. As Conover notes, AI is not a replacement for investment judgment, but it is becoming an essential starting point for deeper research and risk evaluation.
The trend of AI as an investment tool is also fueling investor interest in the space. Brightwave’s $15 million Series A round, closed in October, reflects the broader wave of innovation happening across the private credit ecosystem. According to a survey by fintech firm Dynamo Software, over half of alternative investment firms are actively integrating AI into their workflows — a clear competitive advantage that enables faster strategic moves, more informed investment decisions and ultimately, a higher return on capital.
As the market continues to grow, so will the demand for tools that can keep up. According to Conover, improvements in LLM technology have accelerated at a rapid pace, outperforming cutting-edge tools in the space from even a few years ago.
“The need to fact check has decreased a lot,” he said. “There are still some limitations, but that’s not a reason not to get involved.”
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