Wolf&Grayson EditorialThe financial industry stands at a technological crossroads as artificial intelligence transforms how investments are managed and portfolios are built. With nearly three decades of experience in financial research, Peter Zangari has become a key voice guiding asset managers through this transformation. His insights reveal how cutting-edge AI solutions are creating new opportunities for financial professionals while reshaping traditional investment approaches.
Current State of AI in Asset Management
Asset managers are adopting AI at varying rates, with some organizations still exploring possibilities while others have implemented advanced applications. “In my experience, asset management is a broad index. Some are still investigating exploring what is AI and if and how can they use it. Others are quite advanced in terms of using artificial intelligence in their institutions,” Peter explains.
According to Peter, firms are focusing on two primary use cases. “One is around making their work more efficient, streamlining processes and doing things at scale that historically they haven’t been able to achieve through brute force, through just using people,” he notes. “The second area of focus, which I think is still in the relatively early stage, is using artificial intelligence to enhance the research process to improve the way that asset managers identify alpha.”
Unlocking New Research Capabilities
The ability to generate excess returns above benchmarks—alpha—remains the holy grail for investment managers. Peter describes how AI expands research possibilities: “The fact that you could do more research faster, with more accuracy opens up opportunities for you to explore different ideas. At the limit, the more ideas that you could explore and test and evaluate, the more likely you are to uncover forms of alpha that you haven’t had historically.”
Perhaps more importantly, AI enables managers to work with previously untapped data sources. “Historically, we used numerical data to do research—earnings estimates, numbers that are reported from the government. Now asset managers using AI can use all different types of data, what we call unstructured data,” Peter shares. This includes “text data, voice data, data based on graphics and pictures,” dramatically expanding the information available for investment decisions.
Partnering AI with Human Expertise
Rather than replacing human judgment, successful asset managers position AI as an enhancement to existing talent. “The best way to integrate them is to first understand that these tools sit alongside the personnel, not replace the personnel,” Peter emphasizes. “You can think of these AI capabilities as super assistants to the portfolio managers and researchers.” This collaborative approach creates a powerful combination where technology amplifies human capabilities. “Whatever the manager or the researchers would do historically, now they have this buddy, this assistant that could help them do that in a much more effective way,” he adds. The result is professionals who can “do more and do better.”
Looking ahead, Peter anticipates AI functioning as virtual team members in investment committees. “Think of ‘agents,’ as an AI agent, which is like another person, another researcher sitting on a committee that can offer an opinion,” he explains. “You’re sitting in a committee with eleven humans. And then the twelfth contributor is an AI agent listening to the meeting. It has access to all walls of data. It can do various computations on the fly.” The momentum behind AI adoption continues to build. “We continue to be in a very dynamic space. Things are changing rapidly,” Peter observes.
Client expectations are driving change as well: “Clients are asking questions like “How are you using artificial intelligence?” or if they’re not using it, “Why aren’t you using it?”” With these market forces at work, Peter concludes, “I expect the adoption to only continue and get stronger over time.”
Connect with Peter Zangari on LinkedIn to stay updated on AI-driven investment strategies.
