Artificial intelligence is gaining traction within the institutional investment industry — and with allocators, fintech firms see an untapped opportunity.
Allocators are becoming increasingly comfortable using AI-branded tools beyond streamlining administrative tasks. A survey of 200 institutional investors conducted in Q2 by Cerulli Associates found that while only 12 percent already incorporate some sort of AI into internal investment office activities, most asset owners — 58 percent — are considering implementing the technology (23 percent are actively considering how to do so).
With allocators becoming more comfortable using these tools, fintech companies like Finpilot and Boosted.ai are building AI systems specifically for allocator offices — not just chatbots or workflow optimization tools, but platforms designed to process manager data, analyze performance patterns, and connect dots that would take humans days, if not weeks, to put together.
One use for institutions is analyzing thousands of public managers at scale. Allocators receive materials from hundreds, or even thousands, of managers. For a small organization’s investment office, AI can comb through everything a manager has ever written, said, or reported — then compare it across peers, flag inconsistencies, and suggest questions for upcoming meetings.
Allocators are also using AI-branded tools to build proprietary databases that track every data point ever submitted by a manager — without relying on third-party aggregators, which can be prohibitively expensive.
Lakshay Chauhan, co-founder of Finpilot, a company that provides AI research tools to allocators, told Institutional Investor that the goal of the firm is “reducing the asymmetry between LPs and GPs.”
“GPs have more resources to deploy on research and investing while LPs typically have lean teams,” Chauhan said. “But because AI can scale and go deep into any direction you want, it can act like you have a team of 30 people when you in reality have 3.”
Finpilot’s institutional clients include allocators like Seattle Children’s and TIFF.
Boosted.ai, which also offers services specifically tailored to such institutional investors as RBC, Liontrust, Fort Sheridan Advisors, and Evolve ETFs, automates what CEO Josh Pantony describes as the “drudgery” of filling out reports — ESG reports, SWOT analyses (assessing a company’s strengths, weaknesses, opportunities, and threats), 8-Ks and 10-Ks. (SWOT analysis in particular requires considerable personnel, expertise, and therefore resources to be effective.) The firm can also provide public market research and portfolio monitoring.
Pantony told II in April that when Boosted.ai launched its platform in 2020, it could automate only three percent of what people need to do on a daily basis. Now, it can handle everything except activities that require “human-to-human interaction,” he said.
For example, the platform can analyze thousands of earnings calls, summarize the overarching themes, and determine which companies are still working with, say, Nvidia.
“As the technology has gotten better, the breadth of use cases we can handle has expanded,” Pantony added.
Paul O’Brien, trustee and investment committee member at the $12 billion Wyoming Retirement System, said these tools can be a “great force multiplier for small asset owner teams,” but he wondered what that means for the consulting business. “Are they toast?” he asked. “What can they do that AI can’t?”
O’Brien added that investors should educate their boards on AI and encourage them to get comfortable using it. He also advised establishing an AI lead — “not a tech role but someone who uses AI personally and professionally and can identify the best use cases.”
