This Aussie fund manager says AI spells the end of stock pickers

afr.com:

Washington| As fears of artificial intelligence stealing jobs start turning into reality, one Florida-based Australian private investment manager predicts that there will no longer be value in paying fund mangers to invest in listed markets.

Goanna Capital’s Rob Hilmer, who manages about $US300 million ($440 million) in private technology investments from his West Palm Beach office, says as AI disrupts the fund management industry, it will leave a gap in private markets. The firm’s first fund was started in 2020.

Australian Robert Hilmer says AI will reduce the value of public market fund managers. AFR

“AI is transformational, pivotal. And one of the biggest developments in decades,” Mr Hilmer said.

“Public equities markets [are] already very efficient. Once you introduce a lot of AI type technologies to portfolio management and stock picking, risk management, the universe of managers in public-type markets that can outperform after fees … that’s basically, in my opinion, going away.”

Goldman Sachs, using data on occupational tasks in both the US and Europe, estimated earlier in the year that if generative AI delivers on its promised capabilities, roughly two-thirds of current jobs are exposed to some degree of AI automation.

“Extrapolating our estimates globally suggests that generative AI could expose the equivalent of 300 million full-time jobs to automation,” Goldman Sachs said.

Since AI now has the ability to write text, compose music, and create digital art, Mr Hilmer said the technology would take over public stock picking too, giving investors an opportunity to refine private equity investments.

Investors “are no longer going to need to allocate mostly to public type active managers – that’s gone,” he said. “The