The Biggest AI Investment Mistakes Investors Could Make
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What is the main topic discussed in this episode?
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Welcome to Merrin Talks Money, the podcast in which people who know the markets explain the markets. I am Merrin Somerset Webb, and this week I am speaking with Sarah Katera. Sarah is the CEO of Causeway Capital Management, a firm that she co-founded in 2001. Today we speak about how AI is going to impact and is impacting the fund management industry. We talk about bargains in the UK and whether anyone is ever going to pick them up, what's going on in biotech and pharma, and why you may need more medical devices than you think. Sarah, welcome to Maren Talks Money.
Thank you for inviting me.
Right. Now, why don't we start? Can I just ask you to tell me what it is that Causeway actually does? You've been on the podcast before. We've got piles of new listeners since. So it's a little rundown of what does your business actually do?
Causeway is a fund manager. We manage approximately $80 billion of client assets, and our clients are largely institutional, and our business is global equity. So we have both fundamental research and quantitative research, and we have strategies that deploy equity. Primarily fundamental with quantitative risk control and then primarily quantitative with fundamental risk control. So that's what distinguishes us. It's the convergence of both fundamental and quant.
Yeah, the combination of the two, which is not something you find that often. Okay, so... Following directly on from that, I wanted to ask you about AI because I know you've been thinking about it a lot. I know you've been talking about it. But the key question is how you're using it in your own business. You know, we're hearing a lot about the businesses that are being disrupted by AI and how they're being disrupted. And I'm beginning to hear a lot from people saying, well, what do we need fund managers for? Because AI can do this. Yes. If only. I know.
Well, I believe that the initial applications of AI for us at Causeway, we've had a similar experience to other enterprises in that we've got tremendous efficiency gains from coding. So that our software engineers could do so much more in the same amount of time. And I've noticed this based on our head of investment technology has been able to do much more for our quant effort and the people who work for him. So the quant software infrastructure has become much more developed more quickly. That means that our quant researchers can test. test more ideas and do so not just more quickly, but more accuracy. The head of our digital services, just our whole IT effort, he's been able to help us produce a tax optimizer.
He did it in about two weeks.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–7:07
2
What is the impact of AI on fund management?
7:07–13:34
3
How is Causeway Capital using AI to improve efficiency?
13:34–27:07
4
What are the limitations of AI in investment decision-making?
27:07–35:11
5
Which sectors are currently presenting investment opportunities?
35:11–40:43