Portfolio Construction with Artificial Intelligence

Privé Technologies is proud to participate as a partner in the INFINITECH project among global leaders of the financial services industry with the goal to lower the barriers for Big Data, Internet of Things (IoT) and Artificial Intelligence (AI) driven innovation within asset management and portfolio management solutions.

“We are pleased to be part of the flagship initiative of the European Union for AI and big data in the digital finance industry. My partner and I found Privé Technologies just 8 years ago, and we envisioned the use of artificial intelligence throughout the portfolio management process in a state-of-the-art wealth management platform we have developed”, said Privé's Co-founder Mr. Julian Schillinger at the INFINITECH kick-off event in Lisbon.

Portfolio construction and portfolio management are the core functionalities of Privé Managers and therefore we are going to develop an artificial intelligence-based module for portfolio construction. The approach of putting an investor's perspective at the center, for example a “Markowitz” only based risk-adjusted return optimization, falls way too short.

In order to enable portfolio managers to cover multi-dimensional goals, Privé Technologies will utilize artificial intelligence, by developing an algorithm to encompass diverse aspects of investor's demands. It is expected that the AI-based engine will use a self-learning approach by taking into account several fitness factors such as portfolio diversification or sustainability, as well as key financial figures such as performance, or risk-parameters like volatility, or a combination of these.

The vision and project-goal is that AI-based portfolio construction and optimization will open a new dimension to the asset management and wealth planning industry and shall serve as a support-tool for human advisory and management services. AI shall unfold powerful opportunities for investment management firms, such as relevant improvements of business processes and the reshaping of entire business models. We truly believe that the influence of AI in many areas of life is and will be enormous. We believe this will be especially felt in the area of asset management where many of the potential positive impacts are not yet fully implemented. The human advisor will and shall remain the main contact for the investor, but will naturally work with AI tools in a bionic business model.