This week we have a couple of stories about AI and how it is going to transform investing and be transformed itself.
Our first feature is the report from Clearwater Analytics that finds that AI’s biggest contribution will be in transforming risk management practices.
For an industry where speed and precision of risk identification often determines whether exposure is managed or missed, the shift AI is driving matters well beyond efficiency, the firm says.
Almost all fund managers (95 per cent) surveyed by Clearwater Analytics, across a broad spectrum of fund managers including insurance asset managers, hedge funds, private markets specialists, and general asset managers, have seen improvements in the level of real-time insights being generated since adopting AI into their risk management systems, while 17 per cent said those changes had been dramatic.
AI features in our In My Opinion as well this week which comes from Raul Morena, co-founder of Andova AI, who explains that AI investing is moving beyond the market leaders that defined its first phase.
“The first phase of the AI boom was extraordinary, but relatively easy to understand,” Morena says. “Investors backed the most visible companies linked to the sector, with Nvidia and the other Magnificent Seven companies the clearest examples. These leaders helped define the first stage of AI investing, but they no longer tell the full story.
“As the industry matures, the AI buildout is reaching deeper into the supply chain. The opportunity is no longer limited to the companies producing the most recognisable chips, models or applications. It is spreading across the infrastructure that makes AI possible, from semiconductors and memory to data centres, cloud infrastructure, networking, power and the companies applying AI inside major industries.”
And to get away from AI for a moment, let’s leap to another acronym, M&A, which is enjoying something of a rebound. Gill Wadsworth reports that in the third and fourth quarters of 2025, M&A has seen an increase in deal value of 43 per cent to reach USD4.7 trillion compared to USD3.3 trillion for the previous year.
A 2026 report from McKinsey – M&A trends: Navigating a rapidly rebounding market – found the more benign than anticipated fallout from US trade policies created a confident outlook from dealmakers, which translated into deals for 2025 outstripping the 10-year average of 20 USD3.9 trillion.
Jake Henry, author of the report and Senior Partner at McKinsey, says: “In one of the clearest signs of momentum, global M&A activity landed at 4.2 per cent of total market value for all of 2025, up from 3.3 per cent a year earlier and 3.5 per cent in 2023. While still shy of the 10-year average of 5.3 percent, the improvement is significant and suggests room for growth if historical patterns hold.”
Finally, we are very pleased to be media partners with Future Alpha – you can find out more about the event here.
Beverly Chandler, Managing Editor, Institutional Asset Manager
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