Financial Technology and Hedge Funds
Kaal · 2019
Since their inception in the 1940s, hedge funds have been on the leading edge of technology in finance. Examples include big data, artificial intelligence, machine learning algorithms, and blockchain technology. This book chapter examines how and why private fund advisers utilize emerging technology. Some indicia suggest that emerging technology plays a primary role in front office and investment functions, in the securing of crypto assets, but also in private investment fund managers’ attempts to satisfy the growth expectations of clients. The use of emerging technology in trade execution and other back-office functions goes hand-in-hand with an ever-increasing interest in the private investment fund industry in investing in digital assets. Key Words: Private Investment Funds, Hedge Funds, Private Equity, Technology, Emerging Technology, Blockchain, Distributed Ledger Technology, Artificial Intelligence, Machine Learning, Data Science, Data Scientists, Meta Models, Innovation, Entrepreneur, Big Data, Diversification, Compliance, Optimization, Efficiency JEL Categories: K20, K23, K32, L43, L5, O31, O32 * Professor, University of St. Thomas School of Law (Minneapolis). The author is grateful for outstanding support from Hayley Howe and Nicole Kinn. 1 Electronic copy available at: https://ssrn.com/abstract=3409548 2019 TECHNOLOGY IN HEDGE FUNDS
Cite: Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548. https://doi.org/10.1093/oxfordhb/9780198840954.013.13
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