Artificial Intelligence in Discretionary Fund Management

This chapter delves into the evolving landscape of artificial intelligence (AI) in discretionary fund management, focusing on how AI is integrated into investment processes and the interplay between human expertise and machine intelligence. The text explores the practical implementation of AI, highlighting its role as a supportive tool that enhances productivity and efficiency without replacing human judgment. Key topics include the use of AI in exclusion, integration, and trade execution, as well as the importance of professional judgment in maintaining a competitive edge. The chapter also discusses the different forms of AI, such as Summariser AI and Recommender AI, and their impact on investment decision-making. Interviews with discretionary fund managers provide insights into their perceptions of AI and its role in their workflows. The findings emphasize the need for a 'human in the loop' approach, where AI complements rather than replaces human expertise. The chapter concludes by highlighting the data-driven, technology-assisted, and human-centric nature of fund management, emphasizing the continued importance of professional judgment in the face of technological advancements.