AI for private equity
Put the data room export, the CIM, the QoE databook and the monthly packs in one folder. It rebuilds the adjusted EBITDA bridge on your add-back rules, runs the LBO and drafts the IC memo, and every figure cites the file it came from.
Meridian-EBITDA-bridge.xlsxExample| Add-back | CIM $m | Our view $m | Support | Comment |
|---|---|---|---|---|
| Owner compensation above market | 2.10 | 1.40 | Payroll register, W-2s, market comp survey | Owner totals 3.35 against market of 1.25, and the 0.70 bonus repeats in both years. |
| Consulting fees, Calder Run Advisory LLC | 0.85 | 0.85 | Agreement dated March 2023, invoices CR-1023 to CR-1091 | Work was delivered under the March 2023 agreement, so allow it, but the fees recur. |
| Legal settlement, Harlow Custom Products | 1.20 | 0.00 | Databook note 6, accrual schedule FY2025 | Databook accrues another 0.95 in FY2025 for the same dispute, so the cost repeats. |
| ERP implementation, Northbridge Systems | 1.55 | 1.55 | Vendor invoices 4471 and 4522 | Invoices cover the full amount, and the FY2025 budget carries no implementation cost. |
| Severance, Plant 2 consolidation | 0.90 | 0.65 | December 2023 and 2024 severance detail | The 0.90 combines 0.65 for the Plant 2 closure with 0.25 of routine annual actions. |
| Adjusted EBITDA, FY2024 (reported 47.55) | 54.15 | 52.00 | Databook p. 9, ties to the model tab | The CIM adds 6.60 and we support 4.45, so the two rebuilds differ by 2.15. |
NoteThe 2.15 gap is worth 12.90 of EV at the 6.0x entry, and the Harlow settlement is the add-back that fails.
Ask it for
“Screen Project Meridian from the CIM. Pull the KPI grid the banker highlights, spread three years of financials and flag the figures that disagree across pages.”
Meridian-screen.xlsx“Build the Meridian LBO at $312m EV, 6.0x on $52m adjusted EBITDA, $195m term loan at SOFR+500, 50% ECF sweep, and returns for base and downside.”
Meridian-LBO.xlsx“Set the three lender term sheets side by side, compare margin, floor, OID, ECF sweep steps, call protection and flex language, and rerun our returns for each.”
Meridian-financing-grid.xlsx“Page-turn the seller’s QoE report. Trace every add-back to its GL support, flag what repeats, and start with the owner comp and the legal settlement.”
Meridian-QoE-tie-out.pdf“Draft the Meridian IC memo in the house format from the CIM, the QoE report, the expert transcripts and our model, with the thesis as testable claims.”
Meridian-IC-memo.docx“Roll the October packs from six portfolio companies into one review: KPIs on our definitions, Ashbourne’s covenant headroom, questions on each variance over 5%.”
October-portfolio-review.xlsx
Inside the Private Equity mode
Executive storyline and decks
The IC pack comes out of the diligence file. One message runs through it, every action title states what its slide proves, and the exhibits carry the evidence.
Tie-out and page-turn review
Before IC, it page-turns the banker book, the QoE report and the expert reports, tickmarks each figure to its support and lists the items that will not tie.
Three statement and operating models
Feeds the revenue drivers through the three statements to the debt schedule, with scenario toggles for base, upside and the management case.
Valuation
Builds the trading comps, precedent transactions and DCF behind the football field, then ties the equity bridge from enterprise value to the entry equity check.
M&A and LBO models
It builds the LBO you defend at IC. Sources and uses balance to the cent, the debt schedule runs tranche by tranche, and the sweep feeds the IRR and MOIC grids.
Investment research and IC memos
The memo states the thesis as testable claims, sizes the downside, shows the assumptions that move IRR and leaves the open diligence items visible.
Commercial due diligence
Scopes CDD to the questions that set the price, tests the management case against customer references and expert calls, and says what the evidence cannot prove.
Market sizing and evidence synthesis
Sizes the market bottom-up from customer and supplier counts, reconciles it against the consultant’s top-down number, and codes the expert calls into themes.
QoE and working capital
Rebuilds the EBITDA bridge from the GL detail, tests each add-back against its support, and computes the peg and debt-like items off the SPA definitions.
M&A diligence and disclosure schedules
Reads the data room for change-of-control and consent traps, writes the red-flag report, and keeps the diligence tracker current as items close out.
Debt capital markets and leveraged finance
Puts the lender term sheets in one grid, compares margin, OID, sweep steps, call protection and flex, and shows what each structure does to exit IRR.
Value creation and transformation
Turns the underwriting levers into a 100-day plan with owners and baselines, and sizes the cost, pricing and procurement workstreams the memo promised the IC.
Operating metrics and reviews
Maps every portfolio company’s KPIs onto one definition set, explains the variances against plan and computes covenant headroom from the same figures.
Product and customer profitability
Follows list price down to pocket price in the customer file to find where discounts and rebates leak, then sizes repricing or service moves by customer.
Spend cube analysis
Classifies AP and PO extracts into one spend cube across the portfolio, normalizes supplier names, and measures savings against the stated baseline.
Fundraising and LP materials
Drafts LP letters, DDQ answers and performance tables, with net beside gross on the same methodology and the disclosures extracts and hypotheticals require.
Fair value financial reporting valuations
Supports the fund’s quarterly close with ASC 820 mark evidence, purchase price allocations under ASC 805 and the impairment tests the audit file needs.
- Office skills
- Excel, Word, PowerPoint, PDF
- Tools
- Read, edit and write files, Search files, Run code, Search and read the web, View images
- Connectors
- SharePoint, Google Drive, Gmail, and additional custom connectors
- House style
- Your fonts, layouts and rules, on every file
How it works
- 1
Build the deal folder
Load the data room export, the CIM, the management model, the QoE report and databook, the legal DD reports, expert call transcripts, lender term sheets and the monthly packs, plus the last IC memo the committee approved.
- 2
Ask for the deliverable
Recompute the banker’s adjusted EBITDA on your add-back rules, build the downside case the flex margin implies, or roll the monthly packs into a board review. Workbooks come back with live formulas, and open items list what won’t tie.
- 3
Tie it out before the IC
Trace every figure to its file, and review every file it touched before anything reaches IC. Which add-backs survive is the deal team’s call. The mark belongs to the valuation committee, and the investment decision stays with the IC.
Who it’s for
Private equity deal professionals, operating partners and portfolio operations teams at buyout funds, family offices, independent sponsors and search funds, from analyst to partner.
Questions
Where does our deal and portfolio data go when we use it?
Ultramarine Work changes files only in the project’s folder. When a request needs it, it can read files elsewhere on your computer, never passwords, keys or app data, and you can turn that off in settings. The model runs on Paper Instruments’ servers, so the content it works on is sent there to be processed. Paper Instruments is SOC 2 Type II, and our security and compliance details are on our compliance page.
Will it take the CIM’s adjusted EBITDA at face value?
No, it pulls every figure with the file behind it and rebuilds the bridge on the add-back rules you give it, from owner compensation above market to the settlement that repeats in both years. It notes what it cannot find or reconcile rather than guessing, and the banker’s number sits beside yours with the difference explained. At a 6.5x entry, a $1m overstatement costs $6.5m of enterprise value, so you still check every ruling before it reaches the model.
The NDA is silent on AI. Is that permission?
Silence is not permission, and it is not a prohibition either. Newer deal documents increasingly carry express clauses that bar submitting confidential information to AI systems, and some counterparties treat any outside processing as a disclosure requiring consent. Ultramarine Work writes only inside the project’s folder, but the content it works on is processed on Paper Instruments’ servers, so whether the data room can go in is a decision for your general counsel. The details counsel will ask for are on our compliance page.
Can it set the quarterly mark on a portfolio company?
No, the valuation committee sets the mark, and Ultramarine Work does not make it. It builds the evidence the committee reviews: the precedent multiples behind the comps basket, the calibration to the price you paid at entry, a bridge from the last mark to the current one through performance against plan, and a written record of inputs and judgments. IPEV guidance expects that record, auditors test it, and the committee defends the conclusion of value.
Will LPs ask how the firm uses AI in the DDQ?
Yes, many recent DDQs now ask about the firm’s AI use, covering which tools the firm uses, whether LP or portfolio data reaches them and who reviews the output. The app works in a project folder and hands back files that cite their sources for a person to review. Content it works on is processed on Paper Instruments’ servers. How the firm describes that use is a disclosure decision for your compliance team, and the SEC has charged advisers for overstating their AI use.
Can it rebuild fund numbers onto the ILPA Performance Template?
Yes, it maps the fund admin extract onto the template and rebuilds DPI, TVPI, RVPI and net IRR from the fund’s own cash flows. Net returns are calculated on the same methodology and period as gross, so an LP sees the effect of fees rather than two unexplained numbers. The gross methodology follows the fund’s own basis, because gross performance can be built from fund-to-investor or fund-to-investment cash flows. The fund admin stays the source of record, and your CFO signs the report.