The C$23 billion Canadian fund, OPTrust is embracing the power of technology to improve investment outcomes. Wei Xie explained the fund’s focus on two subdomains of machine learning – reinforcement learning and uncertainty modelling – and how they can be used together.

Speakers

As a senior professional with a unique blend of experience across investment domains, Xie is currently focused on novel investment strategies including: digital assets (crypto, blockchain), machine learning enabled liquid strategies, private and public crossover strategies. As co-chair of the incubation portfolio investment committee (IPIC) with a mandate to develop and implement novel strategies designed to accelerate investment capabilities at OPTrust.
With a breadth of investment experience spanning liquid, illiquid and innovative strategies; across traditional and alternative asset classes; he has a broad investment management skillset including: investment strategy, portfolio construction, macro, strategic relationship management, AI/ML, governance design and stakeholder management.

Moderator

White is responsible for the content across all Conexus Financial’s institutional media and events. She is responsible for directing the bi-annual Fiduciary Investors Symposium which challenges global investors on investment best practice and aims to place the responsibilities of investors in wider societal, and political contexts, as well as promote the long-term stability of markets and sustainable retirement incomes. She is the editor of www.top1000funds.com, the online news and analysis site for the world’s largest institutional investors. White has been an investment journalist for more than 20 years and has edited industry journals including Investment & Technology, Investor Weekly and MasterFunds Quarterly. She was previously editorial director of InvestorInfo and has worked as a freelance journalist for the Australian Financial Review, CFO, Asset and Asia Asset Management. She has a Bachelor of Economics from Sydney University and a Master of Arts in Journalism from the University of Technology, Sydney. She was previously a columnist for the Canadian publication, Corporate Knights, which is distributed by the Globe and Mail and The Washington Post. White is currently a fellow in the Finance Leaders Fellowship at the Aspen Institute. The two-year program consists of 22 fellows and seeks to develop the next generation of responsible, community-spirited leaders in the global finance industry.

Key takeaways

  • The C$23 billion Canadian fund OPTrust is embracing the power of AI to improve investment outcomes via two new strategies on re-enforcement learning and uncertainty modelling.
  • The pension funds hopes to deploy the strategy at a total fund level and combine it with the equity beta portfolio to create a risk reduced equity allocation.
  • At a high level, AI is used to better understand and inform risk in a scalable approach.
  • AI is challenging for investors because of the need to hire people with the right skills. It also involves investment in a data supply chain.
  • Using AI in risk management is scalable across different types of strategies and doesn’t need exotic data as it mainly involves working with price data.
  • OPTrust sought to design a process that used AI to discover when assumptions might be ineffective due to the function of changes in the market.
  • Reinforcement learning gives greater insight into the factors driving price action. Here AI allows investors to detect the non-linear impacts on prices that humans struggle to track.
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