“This article is not written by a large language model (LLM) but by a real human.” That one has to put that statement above is an astonishing fact that, even five short years ago, most people would have thought laughable. Of course, technology and its rapid advances and pervasiveness have dramatically impacted every facet of our lives and society. In one way or another, almost all industries and economic activities have been impacted by technology. Finance is no exception. In recent years, a particularly powerful form of technology, namely AI (of which LLM is the latest example), is poised to cause disruptive change on par with, if not more than, the steam engines during the industrial revolution, the computers in the information revolution, and the internet during the communication revolution.
In this article, we look at how technology has changed the institutional asset management industry in recent years. We look at this from the perspective of both fundamental and quantitative investors, in addition to non-investment functions such as marketing, operations, etc. We also offer a few hypotheses on how technology may further impact institutional investment practices in the near future. First, we briefly discuss three major technological trends driving such secular change.
in VBA Journaal door Mike Chen