Former Goldman analyst prepares new hedge fund

And AI-led hedge fund will launch under the direction of a former Goldman Sachs analyst with a background in military intelligence programming. Its goal: To trade major currencies.

Niklas Hojman has co-founded  Swedish company Century Analytics AB along with Hugo Langeen and Jimmy Carlsson. The company’s proposed CenturyOne currency hedge fund is betting that artificial intelligence will succeed in currency trading.

Langeen is a musician, gambler, and currency trader. Meanwhile, Carlsson has substantial previous programming experience.

Expected returns

The new AI-led hedge fund will target institutional investors looking to hedge their traditional investments with alternative assets.

Launch size is in the range of 100 million kronor ($ 10.3 million). Targeted return in the new fund is 10% annually.

The Eureka Hedge AI Hedge Fund Index has delivered a 220% return since inception through July 2019.

The fund’s proprietary algorithms are expected to take advantage of the renewed volatility in currency markets due to macroeconomic factors such as trade disputes, and the resultant currency wars.

AI-led hedge fund tops humans

“AI is beating humans in increasingly complex tasks, and while finance is extremely complex, it’s natural that AI will be able to find patterns and relationships that humans can’t,” said Hugo Langeen.

The broader hedge fund industry is also embracing AI in a big way. The MIT is setting up the $ 1 billion Stephen A. Schwarzman College of Computing with funding from the CEO of Blackstone, one of the world’s largest alternative investment managers.

Meanwhile, Blackrock, the world’s biggest investment group with $ 6.3 trillion of assets under management, is establishing the “Blackrock Lab for Artificial Intelligence” in Palo Alto, California.

It’s worth noting that AI hedge funds have outperformed their human counterparts over the last five years. However, in 2019, they have lagged the competition.