How AI will disrupt the investment management industry?
The rules of the game are undergoing significant and irreversible changes. The combination of AI/NLP paradigms and techniques with existing mathematical methods and engineering, such as Robust Control, is reshaping the landscape of systematic investment strategies. These advancements are introducing new territories, enriching behaviors, and enhancing the performance of investment strategies. They achieve this by incorporating new data, such as insights and reasoning shared by other knowledgeable individuals, enabling the detection of causal relationships beyond correlations, and facilitating better decision-making in the presence of uncertainties. However, it is important to remember that in this process, the pursuit of perfection can sometimes hinder progress. This paradigm shift raises the question: Is this the end of traditional quants or the emergence of a new breed? Are these AI-driven quants allies or adversaries to fundamental discretionary investment managers? Will they promote...