Fund Solutions

New AI Platform Automates Bespoke ESG Fund Solutions

Arabesque offers “game-changing” tool to help asset managers deliver customisation at scale.

Sustainable investment solutions provider Arabesque has launched a new artificial intelligence (AI) platform designed to automate the creation of customised ESG-focused active equity strategies by asset managers.

Developed by the group’s Arabesque AI business, ‘AutoCIO’ helps managers to configure and build “hyper-customised” active strategies that can be tailored to clients’ sustainability objectives and values through more than a thousand different personalised investment options. The launch responds to growing demand for tailored sustainable investment solutions as well as cost-efficient product development, alpha generation and differentiation.

“AutoCIO is a game-changing solution that can enable asset managers to deliver an enormous range of highly customised ESG investment strategies in a cost-efficient and scalable way. Sustainability issues are fast becoming a global priority, and new technologies like this will empower many more investors to participate,” said Georg Kell, Chairman of the Arabesque Group.

AutoCIO uses AI to forecast performance across a universe of 25,000 equities daily and can create millions of active equity investment strategies. According to Arabesque, AutoCIO is already used to manage investments worth more than US$400 million.

The platform is powered by Arabesque’s proprietary AI Engine, which analyses patterns in data on a large scale to discover relationships that can be translated into alpha opportunities. The AI Engine uses the equivalent processing power of tens of thousands of computers, and is run on carbon-neutral Google Cloud infrastructure. As new data is inputted, the AI Engine re-learns what is driving stock returns and aims to improve over time, removing human biases and reducing the potential for errors.

Kell said AI would play an increasingly important role in the future of active investment solutions as asset managers come under increasing pressure to develop innovate and bespoke solutions for institutional clients.

“Whilst the market is increasingly demanding sustainable products that align with the objectives and values of investors, asset managers are currently unable to offer customisable, active solutions at scale. Investment firms face a fast-changing landscape where many traditional products, tools and approaches are no longer relevant as they once were,” he said.

Arabesque, which comprises three businesses – Arabesque Asset Management, Arabesque S-Ray and Arabesque AI – was established independently in 2013.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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