The evolution of fund selection: Balancing AI and human intuition

In the rapidly changing landscape of fund management, the integration of AI is revolutionising data analysis and decision-making processes. As we enter a new era of fund selection, the interplay between cutting-edge technology and human expertise becomes increasingly crucial. This interview with Johanna Valta, Vice President and Fund Selector at Laicorn Asset Management, explores how manager selection is evolving and why qualitative observation remains indispensable in an AI-driven world.

Data and performance are important, especially as AI has been introduced to help inform your decisions. How do you think the process of manager selection will change in the coming years? What significance will qualitative observation play in the selection process?

I think we are now in the verge of entering a completely new era of fund selection. Artificial intelligence and automation will enable us to crunch data in a fraction of the time it used to take, making the initial screening process a lot easier. However, I think in the era of AI, qualitative observation will play an even a greater role in the selection process.

When considering to invest in a fund I always engage the portfolio managers into a discussion. Having worked in the industry for a long time, I have learned to trust my intuition, and this is something AI cannot replace. For me, fund selection is still very personal and reading between the lines at conversations is at least as important as reading the fund documents. Sometimes things may feel off even if the numbers and data look great – and having learned my lessons, these feelings should never be neglected. I warmly welcome AI to do the time-consuming quantitative tasks on my behalf so that I can focus more on the qualitative part.

How do smaller or emerging funds get on your radar?

We love boutique managers and try to have smaller funds under our radar as much as possible. With a smaller boutique you often have better access to the PM and can brainstorm stock picking ideas with them, also allowing us to have fresh perspectives on the topics we discuss internally. That being said, a manager cannot emerge out of nowhere. We do require a proven track record so often we end up working with managers that might have left from a larger fund to establish one on their own. Such funds we could even end up seeding. On top of that, we meet managers through our personal networks and get recommendations from other investors, especially other family offices. With a small fund, trust is key, so personal recommendations from our close partners are always a good indicator when starting a conversation with a new fund.

Finally, what are you most excited to discuss and learn about at IMpower FundForum this year?

The topic of the panel I am attending is quite juicy: “Pitching to selectors: Do's and Don'ts". I hope we can have an engaging discussion with my peers sharing some stories on the most memorable pitches we have witnessed. On a broader level, geopolitics remains an extremely important topic and I’m convinced it will be covered in several sessions as well as keynotes. I’m also hoping to learn more about AI. And as in every event, people are always the key, so I really look forward to meeting new people from the industry and also to reunite with some of those I have met during the past years in the conference.

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