Global Outlook 2024 Report


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Hedge funds leveraging Gen AI, says AIMA survey

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Hedge funds are embracing generative AI with 86% of managers now granting their staff access to various tools to bolster their work, according to a new survey by the Alternative Investment Management Association (AIMA).

A new AIMA report, titled ‘Getting in pole position: How hedge funds are leveraging Gen AI to get ahead’, draws insights from a comprehensive survey of 157 hedge fund managers globally and interviews with generative AI experts and industry leaders and reveals a resounding consensus among hedge fund managers on the technology’s potential to transform operational efficiencies, drive innovation, and provide a competitive edge.

Uses cases include enhancing marketing materials, carrying out general research tasks, and supporting coding efforts.

Despite widespread acknowledgement of the potential benefits generative AI can bring to the industry, barriers to adoption remain, including data security concerns, inconsistent responses and the need for comprehensive training to help maximise the benefit of using the tools.

According to the survey, both large and small fund managers are equally enthusiastic about generative AI’s prospects, however, intriguing variations emerge in their approaches to resource allocation.

Larger hedge fund managers (those with over $1bn in AUM) appear to have a more bullish view of generative AI’s use cases than smaller peers, particularly around its portfolio management potential. Larger managers are also more likely than their smaller peers to invest in building in-house generative AI tools and training staff to best utilise the technology.

Despite challenges, 2024 could be the breakthrough year for generative AI in supporting investment management processes. Expert opinions in the report signal a growing belief among hedge funds that deploying generative AI can provide a competitive advantage. Hedge fund managers are inherently driven by the pursuit of any legitimate advantage over their competitors, and many view AI, especially generative AI, as a significant opportunity to get ahead.

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