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The Year Ahead for AI: What Alternative Investors Need to Know
Alternative investment managers understand the potential for AI and have experimented with the different tools on the market in 2023. Most have tested the power of ChatGPT, but few understand how to make AI beneficial in their work lives with clearly defined objectives, pre-identified use cases and more coherent strategies.
In 2024, we will see a sharp uptick in generative AI deployments and a shift towards "productionizing" AI, focusing strategically on where AI can deliver the most benefit. Firms will look to enhance portfolio research, refine risk management strategies and automate routine but crucial tasks such as DDQ and RFP responses. The focus will be on how firms can achieve the highest ROI when integrating generative AI into their daily activities and workflows to enhance human decision-making.
Find the Right Partner - And Embrace LLM-Agnosticism
Alts need an AI partner that can meet them where they work and offer pre-built connections to the data stores and applications they already use daily, including CRMs, research systems like DealCloud and Dynamo, market data providers like Pitchbook, collaboration tools, messaging applications and local drives and data rooms. Firms need AI systems that go beyond mere automation to simplify everyday tasks and strike an optimal balance between cost, benefit, complexity, ease of use and functionality.
It’s also the time for firms to embrace LLM-agnosticism. Look for solutions that are Large Language Model (LLM) and provider agnostic and can build on top of existing OpenAI, Copilot and/or other Big Tech solutions. Different LLMs have unique strengths – and being LLM-agnostic allows businesses to choose the best model for specific tasks, optimizing performance and efficiency. We watched the recent chaos unfold with OpenAI, which exemplifies how reliance on one LLM can be risky. Having diversified LLMs will allow you to pivot to an alternative without significant disruptions.
Minimizing Risk
AI deployments can come with concerns and challenges around security and privacy, but firms can limit the risk by implementing the right processes from the start. Practical change management and staff training are paramount for a smooth integration and drive maximum value while ensuring security and compliance. As regulators prepare to take a closer look at this space, firms must anticipate this and prepare today to avoid headaches down the line.
Define Your Use Cases and Start Your AI Journey
Don’t let FUD around AI prevent you from the significant time savings and efficiency gains that await. Request a demo to learn more about BlueFlame’s use cases for hedge funds and public markets, and our use cases for PE, VC and credit, and start on your 2024 AI path today!
Want to learn more about how to think about AI for your firm? Check out our resources: