Artificial intelligence (AI) and machine learning (ML) are reshaping the alternative investments landscape, but professional financial managers still make the most pivotal decisions, according to a Barclay Hedge Fund Investor survey.
The July 2018 edition of the Hedge Fund Sentiment Survey asked managers of hedge funds for their insights and experience with AI and machine learning (AI/ML).
The survey found that more than half of respondents said they use AI/ML to inform investment decisions.
Two-thirds of respondents said they use AI/ML to generate trading ideas and optimise portfolios, while just over a quarter use automation to execute trades.
The majority said they have used AI for three or more years, and a third have used the technology for more than five years.
Hedge fund managers were among the earliest adopters of advanced algorithms and AI techniques. Barclay said this “helps explain why a plurality of survey respondents said they have been using AI/ML for more than five years”.
Sol Waksman, founder and president of BarclayHedge, said: “The 56 percent of respondents using AI/ML suggest we’ve passed the halfway point in the race to digitise alternative investment processes.”
He added: “But we can’t ignore that more than four out of 10 of the survey’s respondents still rely on conventional human thinking to guide their investment processes. Concerns about machines taking over the alternative investments landscape may be premature.”
"Most of the hedge fund managers surveyed are leveraging advanced algorithms and human judgment to deliver smarter investment decisions.”
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