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Over 50% of fund managers are indifferent to AI and machine learning

Tuesday, September 26, 2017
Opalesque Industry Update - Over 50% of fund managers surveyed by BarclayHedge say that they are either taking a wait-and-see approach or have no interest in machine learning (ML) and artificial intelligence (AI).

The survey also found that 20% already utilize AI and ML while an additional 16% are actively researching its utility.

"Given the common perception that AI and machine learning are going to shape the future, the results of the survey may look surprising on the surface," says Sol Waksman, founder and president of BarclayHedge. "But change is going to come slowly to alternative management because there's still a learning curve that needs to be mastered, regardless of whether it's a machine or human doing the learning."

Following the success of firms such as Renaissance Technologies and Two Sigma, many large hedge funds have increased their interest and participation in AI and ML. Industry stalwart Man Group Plc recently announced that they were expanding the use of AI in a number of funds which manage a total of over $12 billion and Protege Partners launched MOV37, which will invest solely in start-up investment funds that employ artificial intelligence. From outside of the industry, Eric Schmidt, the executive chairman of Google's parent, Alphabet, recently told a group of hedge fund managers that in 50 years no trading will be done without computer assistance.

"Artificial intelligence and machine learning may be the way of the future but the reality on the ground right now is different," says Waksman, "All types of businesses, from taxis to hotels to music, have been disrupted by technology and there's a common perception that investing and trading will also be affected. That may be true but it's going to take time for the shift to occur."

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