Key takeaways from the day included:
- AI is reshaping the opportunity set, potentially creating more opportunities while raising questions around concentration, correlation and risk.
- Volatility and dispersion are back, potentially creating more opportunities for hedge fund strategies alongside new risks to navigate.
- Higher rates, liquidity and crowding remain firmly in focus, even amid strong returns and resilient economic growth.
- Inflation and policy uncertainty continue to shape the outlook, as markets contend with energy shocks, changing central-bank communication and geopolitical fragmentation.
- Traditional diversification is being tested, with less reliable stock-bond correlations making portfolio construction more challenging, and more important.
Those themes were also explored further in our keynote conversations. Mike Webb, our Global Head of Liquid Financing spoke with Jean-Philippe Bouchaud, Co-Founder, Chairman and Chief Scientist of CFM, on the firm’s 35-year evolution and how a scientist’s instinct to challenge conventional wisdom has shaped his perspective on markets, models and human behavior. They also looked ahead to the forces reshaping quantitative investing, from AI and machine learning to market efficiency, crowding and the durability of investment signals.
Our Head of Global Markets Adeel Khan was joined by Howard Marks, Co-Founder and Co-Chairman of Oaktree Capital Management, to discuss how AI is reshaping markets, from elevated valuations and concentration risk to the growing role of debt financing, while emphasizing that superior investing still depends on human judgement, rigorous underwriting and qualitative insight.
The bigger takeaway: complexity can create opportunity, but capturing it requires discipline. As markets evolve, investors may need to be more flexible, more selective and increasingly willing to look beyond crowded consensus trades.
