Hedge funds cut stakes in Magnificent Seven to invest in broader AI boom (2024)

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Hedge funds cut stakes in Magnificent Seven to invest in broader AI boom? ›

Hedge funds started cutting their stakes in the Magnificent Seven in the first quarter of 2024 and investing in broader artificial intelligence stocks instead, a new Goldman Sachs analysis shows.

Man AHL and Two Sigma are leading hedge funds that employ machine learning technology to extract valuable signals from alternative data sources. For example, they use ML to detect patterns in satellite images that may indicate economic activity changes.

It shows that liquidated and all defunct single-manager hedge funds account for less than a quarter and almost half of all single-manager hedge funds in the database respectively. Moreover, the increase in cumulative liquidation and attrition rates slows down significantly after funds become more than ten years old.

Therefore, an investor in a hedge fund is commonly regarded as an accredited investor. This means that they meet a required minimum level of income or assets. Typical investors are institutional investors, such as pension funds and insurance companies, and wealthy individuals.

High adoption rate: 86% of hedge fund managers surveyed now grant their staff access to various Gen AI tools to bolster their work, representing a widespread embrace of this transformative technology.

Who is the king of hedge funds? ›

Ken Griffin is the founder and CEO of Citadel, the largest hedge fund in the world as of 2024.

Who Is the Richest Hedge Fund Manager? Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid. In 2022, he earned $41. billion, and by the beginning of 2023 his net worth was estimated at $35 billion.

The influence of hedge funds on the global economy is undeniable. Their investment decisions can affect asset valuations, stock prices, and market stability. Furthermore, their ability to invest in a wide range of assets and markets can translate into a unique perspective on the world's economic health.

Hedges are not likely to go away, and it seems increasingly likely that the 1980s- and 1990s-style hedge fund management will adapt to survive more volatile times.

Hedge funds are not an asset class on their own. They are funds invested in listed equity, listed bonds, private markets, and commodities, meaning grouping them together is inappropriate when trying to build them into your portfolio.

Believe it or not, hedge funds do not run the stock market. In fact, they own only 3 percent of the market. "Hedge funds and ETFs represent small but growing shares of the equity market," wrote Goldman Sachs' David Kostin in a new report to clients.

India's largest AMC SBI Mutual Fund, which owned equity assets worth over Rs 6.45 lakh crore at the end of March, added 61.30 lakh shares of Kotak Mahindra Bank, 56.85 lakh shares of TCS, 47.61 lakh shares of ITC, 30.45 lakh shares of Reliance and 28.33 lakh shares of HDFC bank in its portfolio.