Japan’s ¥157trn (€1.2trn) Government Pension Investment Fund (GPIF) is to explore the possibilities of how to use artificial intelligence (AI) technologies for the long-term asset management of the pension fund.

It today announced that it was partnering with Sony Computer Science Laboratories (Sony CSL) for a study on AI’s impacts on asset management.

The research will analyse the potential effects on managers’ business models and “appropriate” evaluation methodologies reflecting such impacts.

It will also consider the possible use of AI technologies to reinforce long-term investments, including AI-driven dynamic factor analysis and scenario-based risk management.

The study will also explore whether AI technologies could be used to reconcile asset managers’ explanation of their investment decisions and the actual track record of trading data.

Hiro Mizuno, executive managing director and chief investment officer at GPIF, said: “Given recent developments in AI technologies, GPIF is increasingly convinced that AI would be able to assist our fund investment operation, from asset allocation to asset manager selection and evaluation processes.

“By partnering with Sony CSL and leveraging their cutting-edge AI research, GPIF aims to stay ahead of the curve to remain capable of fulfilling our fiduciary duty to future generations.”

Hiroaki Kitano, president and CEO, director of research at Sony CSL, added: “The progress of AI technologies, including deep reinforcement learning and generative adversarial networks, has been incredibly significant and it is transforming a broad range of industries. Finance and asset management is no exception.

“It is noteworthy that GPIF has decided to investigate the ramifications of AI for their mission and how AI can be introduced into their operations.” 

In Europe, the €417bn Dutch asset manager APG last year struck a research partnership to investigate whether artificial intelligence and blockchain technology could benefit its operational management.

Tokyo, Japan

Credit: Ben Cheung