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Alternative Market Briefing

Fund managers rely on AI to generate alpha during pandemic

Tuesday, November 30, 2021

Bailey McCann, Opalesque New York:

Fund managers are increasingly relying on artificial intelligence to generate alpha, according to a new report from Deloitte. The report is based on responses from 400 senior investment management executives.

According to the report, 85% of the respondents that use AI-based solutions in the pre-investment phase either strongly agreed or agreed that AI helped them generate alpha.

Managers are also planning to increase their AI spend. The top two technologies funds plan to allocate to over the next 12-18 months are natural language processing and alternative data.

To make the best use of these technologies, firms will also have to improve overall conditions for employees. Data in the report shows that the firms that were most successful at generating alpha through the use of AI also rated highly on employee engagement and productivity; employee wellbeing, and the ability to implement new technologies quickly and easily.

Asset managers that have M&A as part of their business strategy have also noted the benefits of new technologies. Respondents cite adding new technology capabilities as the top driver for M&A transactions, followed by increasing scale and distribution channel expansion. These firms are looking to fuel growth through enhanced products and customer experience delivered to an expanded client (and prospe......................

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