Tarrant Sees AI as the Third Wave of Fund Management

June 12, 2017 James Heinsman Hedge Fund News

Jeffrey Tarrant, CEO and chief investment officer of Protégé Partners LLC, believes that future hedge fund managers will need to be able to be proficient in machine learning processes. He envisions a future in which funds using such machine learning will outperform and grow more quickly than funds using traditional strategies for investing.

“Artificial intelligence will fundamentally change investment management,” declared Mr. Tarrant.

Protégé manages $800 million in emerging hedge fund seeding strategies. In November, 2016 Tarrant started MOV37 LLC to invest in small, emerging hedge funds, but using autonomous learning investment strategies. He is also CEO and CIO of the infant company.

“This is the third wave of investment management. It’s populated by guys aged 25 to 38 who possess totally different skill sets” than those used by the first wave of discretionary managers and the second wave of quantitative managers, he said.

Managers of the future, which is already here, will need to know automation and be able to analyze huge amounts of data streams. He also said that the people with these skills today are “the guys whose parents yelled at them for spending too much time in the basement playing electronic games. They are wired differently and don’t give a (hoot) about the old models.”

What has really made the difference in terms of the present and future success of these new-fangled fund managers, who Tarrant likes to refer to as the “third-wave” of fund managers, is that “artificial intelligence is finally working,” Tarrant added.

Tarrant gave the following example of how far AI has come: It took a computer 38 years to become the world’s best checkers player in 1994; It took 12 years for a computer to beat the world chess champion in 1997; but it only took six years for a computer to finally beat Ke Jie, the world’s best Go player.

artificial intelligence, Go, Jeffrey Tarrant, Ke Jie, MOV37 LLC,

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