Employment of financial managers who work at funds, trusts, and other financial vehicles will increase by 20.7 percent from 2023 to 2033, according to the U.S. Department of Labor. This is much faster than the average for all occupations. "Over the past five years, North America has been the only major economic region to grow hedge fund assets, both through investment returns and new capital commitments," according to Preqin's 2024 Private Equity Global Report. Preqin predicts that North America-based hedge fund growth will continue to outpace other regions.
More hedge funds are using advanced artificial intelligence—including machine learning and generative artificial intelligence (Gen AI)—to operate more effectively and improve investment performance. Artificial intelligence is technology that can be programmed to make decisions which normally require human thought and act independently of humans. Machine learning is a method of data analysis that incorporates artificial intelligence to help computers study data, identify patterns or other strategic goals, and make decisions with minimal or no intervention from humans. Gen AI is a form of machine learning algorithms that can be used to create new content (including text, simulations, videos, images, audio, and computer code), as well as analyze and organize vast amounts of data and other information. "Hedge funds are entering a new era poised to reshape investment strategies and operational efficiencies with the advent of Gen AI," according to the Alternative Investment Management Association (AIMA). Eighty-six percent of hedge fund managers who were surveyed by AIMA in 2023 said that they granted their staff access to various Gen AI tools. (A total of 157 hedge fund managers were surveyed. In aggregate, these respondents managed an estimated $783 billion.) "Gen AI tools are demonstrating their versatility within hedge funds to enhance marketing materials, carry out general research tasks, and support their coding endeavors," according to AIMA. Although survey respondents were largely positive about the technology, some expressed concerns about data security, the trustworthiness of content generated by Gen AI, and the need for comprehensive training to bring workers up to speed on the uses and pros and cons of the technology. Hedge fund managers who are familiar with advanced artificial intelligence will have better job prospects than those do are not use these technologies.