Enhancing the potential of AI in Hedge Funds: AI-powered asset management

Abstract

Artificial intelligence in the financial industry is a rapidly growing trend, and the alternative asset management industry is no exception. This paper studied the key success factors for AI adoption in alternative investment firms. The author, who recently joined the alternative investment industry, was able to gather insights from his network. This paper seeks to explore the opportunities and risks associated with employing AI in alternative asset management as well as the challenges related to automating manual tasks across front, middle, and back offices, considering the impact of automation implementation on employee roles and responsibilities. A literature review on the application of AI in finance, specifically in hedge funds, as well as the barriers of AI adoption in organizations is presented. A research survey resulted in 103 responses from individuals working in the industry, enabling us to draw conclusions on formulated hypotheses, supported by statistical analysis.