20th February 2018
The world’s biggest asset manager BlackRock is planning to build a new research lab dedicated to artificial intelligence in Palo Alto, California.
The US company — which has $6.3tn of assets under management — is also building a new internal data science core” unit as part of its so-called Tech 2020 plan, the Financial Times reported.
What was said:
BlackRock’s chief operating officer Rob Goldstein said the lab plans to “augment our current teams and accelerate our efforts to bring the benefits of these technologies to the entirety of the firm and to our clients” in a memo seen by the Financial Times.
(Excerpt from Financial Times – Mick Raven)
“BlackRock is setting up a new centre dedicated to research in artificial intelligence, underscoring the heightened interest among asset managers in how machine learning can revolutionise many facets of the investment industry.
The world’s biggest investment group, with $6.3tn of assets under management, is establishing a “BlackRock Lab for Artificial Intelligence” in Palo Alto, California, according to an internal memo seen by the Financial Times.
The memo, sent by Rob Goldstein — BlackRock’s chief operating officer who is in charge of the company’s technology group — said that the lab will “augment our current teams and accelerate our efforts to bring the benefits of these technologies to the entirety of the firm and to our clients”.
David Wright, head of product strategy in Europe for BlackRock’s $109bn scientific active equity division, was quoted saying that fund managers are “engaged in an arms race” to develop data analysis techniques that can beat humans at computing large amounts of data.
Big data offers a world of possibilities for generating alpha [market beating returns] but traditional techniques are not good enough to analyse the huge volumes of information involved.
Why it matters:
The plan highlights a growing interest among asset managers to replace human stock pickers with robots, by expanding uses of machine learning, which provide systems to process and analyse volumes of data too big for humans to process.
Hiromichi Mizuno, chief investment officer of Japan’s Government Pension Investment Fund, told Bloomberg last year:
I believe artificial intelligence will be able to either replace or enhance the asset managers’ work, particularly for short-term trading.
Other Wall Street investors following suit with broad scale investment in big data analysis include JPMorgan, who recently promoted their global head of equity trading to oversee its expansion into data analytics and find new opportunities in machine learning and artificial intelligence.
The new lab will be led by Stephen Boyd, a Stanford professor that has consulted for BlackRock since 2013.
The new data science centre will be headed by Sherry Marcus, former chief data analytics officer at the hedge fund Millennium Management, and Rachel Schutt, who previously served as News Corp’s chief data scientist.