Over the past 25 years, active asset management has undergone a quiet revolution –sometimes subtle, sometimes seismic. What began as incremental improvements in operational systems has now accelerated into a wholesale transformation driven by technology. The rise of artificial intelligence (AI), in particular, is reshaping the landscape, forcing a rethinking of roles, processes, and value propositions.
Peter Kempen (pictured), the head of distribution at Coronation, brought these themes into sharp focus at the PSG Financial Services Annual Conference this month.
Looking back, he painted a picture of how the sector has matured: from the siloed, spreadsheet-heavy risk systems of the early 2000s to today’s integrated platforms offering real-time analytics and cross-asset class visibility. These innovations, he said, have not only improved operational efficiency but also made portfolios more resilient and adaptive to market shocks.
But while outsourcing, algorithmic trading, and robotic process automation have already become staples of the modern asset management toolkit, it is AI that represents the real game-changer.
Kempen described how AI’s ability to process vast quantities of unstructured data is unlocking insights that were previously out of reach.
“It provides real-time insights that would be very difficult for managers to get,” he said. “They are rich, and they often detect signals that you wouldn’t really see in structured data.”
The advantages are compelling: faster decision-making, more accurate forecasts, fewer repetitive tasks. AI doesn’t get tired. It doesn’t panic in market turmoil. And it never forgets. But the picture isn’t all one-sided.
“Who wins? What is the end result here? Does AI eventually take over from human beings?” Kempen asked.
AI may excel in scale, speed, and pattern recognition, but it lacks the human strengths of judgment, intuition, and contextual understanding.
“An AI cannot explain nuance,” he noted. “It does not understand things like geopolitics or corporate culture.”
Humans, by contrast, can assess management credibility in a meeting or adapt to an unprecedented event – skills that remain beyond the reach of even the most sophisticated algorithm.
Impact of AI on active asset management
Kempen identified four key areas where AI is already reshaping the industry.
The first is its ability to provide deeper insights by rapidly processing vast volumes of unstructured data – such as earnings call recordings, news articles, social media sentiment, and web traffic. These data sources, he noted, are challenging for humans to analyse at scale but are easily handled by AI.
Second, AI significantly enhances efficiency. It automates tasks such as trade routing and report generation, reducing the burden of routine work on portfolio managers and analysts. This frees up time for higher-level analysis and decision-making.
A third benefit is AI’s predictive power. Kempen explained that AI can learn non-linear relationships and uncover patterns and signals that human analysts may miss, enabling asset managers to operate at a far more sophisticated level.
Finally, Kempen said AI has transformed research productivity.
“We’ve likened having AI in your business to having an endless number of junior research analysts,” he noted.
By automating the repetitive and time-consuming work typically assigned to junior staff, AI enables senior professionals to focus on strategic, high-value activities.
Advantages and disadvantages of AI and human analysts
But the question of whether AI will replace human analysts is more nuanced.
Kempen argued that the answer lies in unpacking the respective strengths and weaknesses of AI and human analysts.
On the side of AI, he highlighted three key advantages: scale, pattern recognition, and emotional discipline.
“Human beings are much better at analysing a handful of companies quite deeply, but they definitely can’t process huge amounts of data the way that AI can,” he said.
AI is also far better at spotting patterns in unstructured data without fatigue.
“Humans are limited by their cognitive load… but from an AI perspective, very easy to do.”
Last, AI’s immunity to fear, greed, and behavioural biases gives it an edge in emotionally charged environments.
But humans retain crucial advantages – most notably in judgment, adaptability, and communication.
He added that humans can adapt strategies in new or unfamiliar contexts, something AI, bound by historical data, cannot do.
On communication, he warned: “AI will always provide an answer, even if there shouldn’t be one,” whereas people can justify decisions, explain risks, and build trust.
Both AI and humans, however, share an important trait: the capacity to innovate. AI learns and optimises continuously, while humans bring creativity and intuition.
The future of asset management, Kempen concluded, lies not in choosing between man or machine, but in harnessing both. “And this is not just in portfolio management or asset management. I think this is just in general. AI augments the human beings. AI brings that consistency, the efficiency, automation, whereas human beings bring intuition, adaptability and so on to the table.”
