The funds management industry is undergoing a technological transformation, with artificial intelligence (AI) playing an increasingly prominent role. However, many investment professionals argue that human judgement remains crucial. Armina Rosenberg, a portfolio manager at Minotaur Capital, exemplifies this approach. Minotaur Capital is a global investment firm. Their global opportunities fund returned 33.5 per cent over the past 12 months, outperforming the MSCI All Country World Index by 10.8 per cent.
Rosenberg utilises AI through her fund’s proprietary technology platform, Taurient, to process vast amounts of data and generate investment ideas. Taurient processes tens of thousands of articles and transcripts to generate and test ideas. Despite relying on AI, she considers herself a fundamental manager, likening her investment process to ‘advanced chess,’ where human players use computer engines to explore options before making decisions. She argues that while quant models excel at identifying statistical relationships, they often miss the nuance and struggle with new technologies, where fundamental analysis can prevail.
David Aylward, founder of Tribeca Investment Partners, echoes this sentiment, asserting that fundamental managers will not be displaced by AI. He highlights their advantage in analysing significant historical events like the 2008 global financial crisis or the COVID-19 pandemic. Similarly, Martin Conlon, head of Australian equities at Schroders, notes that fundamental investors are no longer the ‘price setters’ in the market, with quant and earnings momentum strategies gaining prominence. Schroders is a global investment management firm. However, he believes that fundamental investors should leverage their ability to analyse numbers in a long-term context, rather than trying to compete with computers in short-term earnings momentum.
Ram Rasaratnam, chief investment officer of AXA Investment Managers’ quant fund, observes that the deluge of data makes it harder to find and exploit market inefficiencies. AXA Investment Managers is a global asset management firm. However, he adds that AI provides a valuable tool for extracting more information from existing datasets, citing the example of analysing global patent data to identify companies with strong fundamentals. Overall, the consensus appears to be that the best approach combines the strengths of both humans and machines, leveraging AI for data analysis while relying on human judgement for nuanced decision-making.
