New Quants Are Focusing on Artificial Intelligence

There is a new breed of “quants” that are looking to disrupt the industry using artificial intelligence (AI), according to a recent article in Institutional Investor. One such fund is Numerai, started by 30 year-old South African Richard Craib, who thinks AI will “lower the cost of fund management, producing savings that can be passed on to institutional and retail investors.” While typical quantitative investment firms use people to build systematic strategies, Craib and his firm Numerai “intends to teach machines how to do that,” according to the article. Renee Yao, a Ph.D. in math and statistics, founded statistical arbitrage […]

Hedge Fund Coatue Invests in Data Science

Hedge funds continue their push into “big data” analysis to land trading opportunities, and Coatue Management LLC is no exception, according to a recent article in The Wall Street Journal. The fund recently announced a $27 million funding round for a company called Domino Data Lab Inc., a San Francisco startup founded by Bridgewater Associates LP alumni. Coatue joins other investors including Bloomberg Beta, Zetta Venture Partners and Sequoia Capital. “Domino’s software allows data scientists to run experiments and analyze data in a collaborative program,” the article explains, “which helps analysts at Coatue discover new trends and hand them to […]

Change is Coming for Financial Advisers

It seems that artificial intelligence is useful for more than just Pokémon Go. According to Jason Zweig’s recent blog in The Wall Street Journal, financial advisers are increasingly using the technology to better serve the needs of their clients. While advisers can understand a client’s situation by gauging their mood and asking questions concerning goals, dreams and risk tolerance, a computer can amass and dissect huge amounts of data to predict behavior. For example, Zweig writes, “it can trawl through your actions—saving, borrowing, spending, prepaying a mortgage, buying a car, trading stocks and so on—to see how they correlated to […]

Artificial Intelligence Descends into Investment Management World

Wired profiles the rise of artificial intelligence (AI) in investment management. Ben Goertzel’s company, Aidyia, recently began using AI to make real trades. Another company, Sentient, has been making trades according to AI recommendations since last year, according to CEO Antoine Blondeau. AI might be seen as an evolution from the use of complex statistical computer models to inform trades, but the two are different in that quant models tend to be static and AI is designed for machine learning. Two techniques that may be built into AI illustrate the point. “Evolutionary computation,” as explained by Blondeau, involves creating digital […]