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University of Edinburgh and Abrdn develop AI investment tool

The University of Edinburgh and Abrdn are to release an artificial intelligence (AI) investment tool to support its investment research process.

The £7.5m strategic partnership between the two was announced in 2022, when the Centre for Investing Innovation was formed

This aims to address challenges facing the investment and asset management sector across three main areas: sustainability, thematic investing and innovating investing.

Abrdn said the idea is to “create a generative AI-powered research companion that will combine an enhanced large language model with statistical inference to support Abrdn’s investment teams”.

The focus of the tool will be to expand the breadth of securities that Abrdn’s investment teams can review, and the depth of quantitative analysis that the team can draw from.

Abdrn explained that most AI technologies being deployed by asset managers in investment decision-making focus on identifying specific risks or analysing prior decisions.

This AI tool, by contrast, will support Abrdn’s research team “by applying their process in a scalable way across a broader range of securities to deliver more timely and richer insights”.

The tool will go beyond delivering an enhanced version of a customised large language model (LLM) by adding a “statistical brain”.

Researchers from the University of Edinburgh’s Schools of Informatics and Maths are exploring how existing LLMs might be “adapted and enhanced to synthesise the huge amount of data needed to make investment decisions”.

The new tool would also provide explainability of how decisions are reached.

It is envisaged as an add-on to existing team capabilities, with the “reports and insights generated requiring human intelligence to be overlaid”.

The tool is expected to bring quicker and more informed investment decisions, and the project “will also create opportunities for students and early career researchers within industry, as well as knowledge-sharing around forecasting and prediction for academics”.

Abrdn investment director and the project co-lead Echo Yang said: “AI has the power to make a substantial contribution to our existing investment processes, but like any new technology it has to be harnessed correctly to deliver real benefits.

“By working with the University of Edinburgh’s world-class team, we can bring the best academic insight and match that with Abrdn’s real-world experience of markets and investing.

“There is an ever-increasing range of data points to analyse as we constantly seek to deepen our analysis of the markets we invest in. Through exploration of generative AI to support our investment teams, we have the potential to deliver even more value for our clients.”

Centre for Investing Innovation director Professor Sotirios Sabanis and co-director Professor John Vines said: “Developing a high impact financial decision-making model requires a collaborative effort and interdisciplinary expertise integrating, in our case, mathematical modelling, natural language processing and insights from the psychology of human behaviour.

“As well as benefiting investors and customers, research co-created with industry like this also offers secondment opportunities for students, enhances our education programmes, creates knowledge-sharing opportunities for researchers and ensures our research is helping to meet society’s challenges.”

The joint project aims to deliver an alpha test model for trialling in the business in 2025, and a full prototype by the following year.

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