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AI can outperform LPs at picking top private equity funds, study finds

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AI can pick top-performing private equity funds better than many institutional investors, Oxford study finds

that considered both released and unrealized returns, the top quartile of funds selected by the AI model generated 2.10x the original investment versus an industry average of 1.85x.

It described qualitative information in fund prospectuses, specifically the long strategy section where fund managers describe the investment opportunity they are targeting, as salient but overlooked. One reason for this could be that qualitative is not readily comparable from one fund to the other, and not easily digestible, the study said.

"You cannot automatize it and not have any humans intervening," he told Insider."That's a recipe for catastrophe."Oxford Saïd Still, investors must factor in the wider macroeconomic environment before making decisions. In a buzzy market, LPs are in high demand. AI could also help streamline the work of sifting through pitches, he said.

 

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