Brevan Howard's AI spinoff is using LLMs to turn analysts into quants
As hedge funds build out their own AI platforms, some are already spinning them out as fintechs. Bin Ren, the CEO of a firm in the latter camp, spoke today at Fintech Connect 2024. He decared that LLMs will cause a "quantum leap in productivity."
Click here to follow our new WhatsApp channel, and get instant news updates straight to your phone 📱
Ren runs SigTech, which spun out of Brevan Howard's systematic investments group back in 2019 and implements multi-agent generative investment copilots (MAGIC). He describes it as a team of highly specialised "AI Avengers" to assist in the investing process.
Finance has historically been split into "two modalities" according to Ren: numbers and text. Quants worked in the former and analysts worked in the latter, and infrequently the two shall mix. Through LLMs, however, Ren says we can "converge those modalities into one." AI of the past has helped automate processes, but Ren says what held it back from allowing employees to branch into new fields was its lack of awareness of "tacit knowledge," which generative AI excels at.
Work is evolving to focus on prompt engineering and "eliciting a good answer out of the LLM that is super capable." At hedge fund Man Group, for example, staff are encouraged to ask its in-house chatbot to explain how it came to a conclusion so that they can see and correct any hallucinations. There's no best practice (yet) for AI, however, and Ren says "nothing is a substitute with you spending ten hours experimenting with LLMs" to see what works best for you.
One of the most common analogies is that AI is like an intern, but Ren asserts that, in some ways, it's better. AI bots are "never emotional and infinitely patient, which is a great virtue to have." In an agentic structure, AI can "collaborate in ways that are inconceivable for humans," such as creating their own language to communicate information to each other, when English is too inefficient.
Have a confidential story, tip, or comment you’d like to share? Contact: Telegram: @AlexMcMurray, WhatsApp: (+1 269 237 3950). Click here to fill in our anonymous form, or email editortips@efinancialcareers.com.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)
