The Future of Alternatives: AI in Alternatives - SEI

by Preqin

  • 03 Oct 2018
  • PE
  • VC
  • HF
  • PD
  • RE
  • INF
  • NR

As the alternative assets industry continues to grow, Preqin is launching an initiative examining the Future of Alternatives. In conjunction with key industry participants, we take a five-year look into the future to see where the market will be, what changes fund managers are planning for and how investors plan to invest in 2023.

This contribution is provided by Chad Longenecker, Managing Director - Alternative Investment Fund Services at SEI Investment Manager Services.

We have seen AI technologies introduced into the asset management space in recent years mainly on the RPA side of things, helping to improve process flows and eliminate inefficiencies. Going forward, however, we feel that AI will have the greatest impact in the realm of big data, from the GP’s collection of disparate and varied datasets to analyzing it for portfolio construction and delivering increased levels of insightful transparency to the LP community.

As managers continue to strive to deliver alpha, they are seeking an advantage from the use of structured and unstructured data from primary and secondary sources, yet have found difficulty in determining what is important and what is just noise. AI’s most significant impact will be to minimize this problem, allow for better performance attribution, turn unstructured data into something more easily analyzed, inform a GP’s future portfolio construction and provide LPs with more detailed transparency in their investment.

While relatively nascent, cognitive automation and PDF scraping are two encouraging means of doing this today. Furthermore, as LPs start receiving larger datasets from more GPs, they will now have to address aggregating and mining their own customized data, the result being that they may be better able to optimize their existing portfolio as well as uncover new insights for future investments.

Download your copy of the Preqin: The Future of Alternatives here.

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