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Matthias Knab, Opalesque for New Managers: Combining AI capabilities with human judgement, insight and wisdom will create a sustainable competitive advantage for asset management boutiques, according to the Group of Boutique Asset Managers (GBAM).
Speaking at their annual international conference in Florence on Friday, members of GBAM, an international network of independent asset management firms whose members include SKAGEN Funds, MAPFRE, Aubrey Capital Management, Nextam Partners, First Avenue, Ranmore Fund Management, Azvalor Asset Management and LarrainVial Asset Management, agreed that while data quality and organisational readiness are critical success factors in the adoption of artificial intelligence, AI alone will not deliver competitive advantage.
Benefits are real, but will be widely shared
The group agreed that the rapid development and adoption of AI will automate existing processes across the business and is already delivering meaningful benefits in research, software development, marketing and operational functions. Transformational changes that combine processes with new insight, however, will be harder to come by.
Delegates heard numerous examples of AI improving business processes, including investment research, coding, marketing communications, client reporting and operational workflows. They noted, though, that many of these benefits will become widely available across the industry, reducing the scope for firms to gain a lasting advantage from technology alone.
"The one thing we know of our ability is that it is based on superior judgement. That's what we bring to the party. It's judgement; it's the ability to find context in things that can't be easily read as right or wrong," said GBAM chairman Tim Warrington, former Chairman and CEO of SKAGEN and Executive Director at Storebrand AM.
AI as a utility
A recurring theme throughout the discussions was that AI is likely to become a utility available to almost every investment firm. As a result, the differentiating factor will increasingly be the quality of human decision-making, interpretation and stewardship applied alongside the technology.
"We're all going to get similar levels of AI collaboration, eventually. So, what is it that you're going to do with your people, or focus on, to really succeed with AI in a way that other firms can't?" said Warrington.
Conference members agreed that boutique firms are particularly well placed to benefit from this evolution, because their investment processes are typically built around specialist expertise, independent thinking and close client relationships.
The conference concluded that while AI will undoubtedly become a core component of asset management businesses, the firms best positioned for long-term success will be those that combine technological capability with the uniquely human qualities of judgement, insight and wisdom.
About GBAM
The Group of Boutique Asset Managers is a global network of independent specialist asset managers who have come together to improve their presence in international marketplaces. GBAM describes boutique firms as having a limited range of products, a close relationship with clients and a relatively flat organisational structure. Its member firms tend to be small to medium sized, entrepreneurial and owner-managed, and focus on manufacturing investment products rather than mass distribution.
www.gbammanagers.com
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