Part
01
of one
Part
01
What are examples of innovation from major asset management firms, or related companies?
Hello! Thanks for your question about examples of innovations from major asset management firms. The short version is that the major innovations are Big Data, Artificial Intelligence, and Machine Learning Strategies, and low-cost portfolio management. Below you will find a deep dive of my findings.
Methodology
I have provided examples of major asset management firms' innovative solutions from at least 5 companies. They are all key global players, thus they can be categorized under "major firms". The innovations identified are mostly B2B approaches but they can easily be applied to the B2C market. In order to provide further information, I included the 2016 awardees/winners for best innovative firms including their approaches and process as to why they are chosen for the award.
Innovation from major Asset management firms
1. The Frankfurt-based Asset Manager Catana Capital
Catana Capital launched the first public alternative investment fund globally. This enables their firm to automatically collect, filter, weight, and compare information from the internet, as the basis for every investment decision. Additionally, up-to-date markets news are evaluated in real time every day.
The CEO of Catana Capital even states that the trading strategy is "ground-breaking" for the asset management industry, and the interest in Big Data and Artificial Intelligence is quite high for institutions and private investors.
The launch of OYSTER Multi-Asset ActiProtect, a new sub-fund of Luxembourg SICAV. The fund offers multi-asset management that seeks to generate two-thirds of the global equities over the medium to long-term with only a third of the risk.
By acquiring exposure to a wide range of assets, such as bonds, equities, currencies, gold, silver, etc., it invests throughout the world through index based products. The innovation lies in dynamic management of the risk budgets, which combines economic scenario modeling and systematic monitoring of the maximum draw down. This is realized through a proprietary hedging methodology aimed at limiting the maximum draw down to a 10%.
On January 9th of 2017, Conning decided to launch an innovative pooled fund suite focused solely on liability driven investment (LDI) solutions for U.S. corporate pension plans. The fund plans to offer pension plans various investment options depending on where they are financially.
The funds are meant to serve as building blocks to customize a pension plan’s investment strategy. They range from the standard long duration to the mature bucketed credit sleeves, which can be used on their own or blended to develop a customized LDI strategy. The CEO of Conning believes that in order to grow the Conning business to serve its investors' evolving needs, launching the fund is the logical step to take.
Allianz Global Investors has launched a new global artificial intelligence equity fund in Europe. This is another example of AI advancements that are used in different areas other than Big Data analysis. This launch also focuses on Machine Learning, self-driving cars, and the Internet of Things.
The Allianz Global Artificial Intelligence Equity fund will be available to both retail and institutional investors. The firm said the fund is the first of its kind in Europe and is an expansion of a strategy which launched in Japan in September 2016, in partnership with Sumitomo Mitsui Asset Management and Nikko, which currently has $1.8 billion (£1.44 billion) in assets under management.
The BOV Conservative Portfolio Fund, BOV Balanced Portfolio Fund, and BOV Growth Portfolio Fund are regulated by the UCITS Directive. It is said to be the first risk driven fund on the Maltese market. This is a first for the company, and the aim is to propose a cost effective investment vehicle, thereby offering better value to investors.
The Chief Officer of Investment at BOV states that the company is launching three portfolio funds in order to "address the different levels of risk" designed to match distinct risk profiles.
Winners for best innovative firms and trends
The company won for its investment analytic and portfolio management which was based on the low-cost “pure risk-factor investment” approach. The article stated that the company showed how risk factors should be part of the portfolio and not a hedge fund strategy. Using that analysis the innovations above all seem to accomplish that, thus making them quite successful.
Launched the Jupiter Global Ecology Diversified SICAV which offers exposure to a mixture of shares and bonds of companies that provide solutions to environmental and social challenges. It seeks to deliver both capital growth and income while carefully managing risk.
TRENDS
A trend that seems to be catching on are the Big Data, Artificial Intelligence, and Machine Learning Strategies. Leading asset management firms are combining big data analytics along with artificial intelligence and machine learning to achieve two objectives:
2. Improve cost-effectiveness by leveraging expensive human analyst resources with scalable technology
CONCLUSION
To wrap it up, a trend that seems to be catching on in Major Asset Management firms include Big data, artificial intelligence, and machine learning strategies.
Thanks for using Wonder! Please let us know if we can help with anything else!