AI in Asset Management: Transparency, Innovation, and the Future

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  Serge Nussbaumer
  Chefredaktor

Mr. Züllig, Private Alpha relies heavily on artificial intelligence. What was the original impetus for integrating AI into the investment process and how has its performance developed since then?

In the fast-moving world of finance, information determines market developments like never before. The better informed we are, the more precisely we can make decisions. However, gut instinct and a focus on individual indicators play a major role in many investment processes. Without AI, the CIO reaches its technical limits. How are they supposed to manually combine thousands of indicators into a coherent market opinion? Today, AI is no longer a luxury, but a necessity for deciphering complex data patterns and suppressing emotions – regardless of whether we are writing texts or analyzing financial data.

Black box models are used by many Investors viewed skeptically. How can you create transparency and trust in such a situation?

We attach great importance to traceability and transparency. This is exactly what we achieve with the CaesarDPT approach: not a black box, but clear, comprehensible results. CaesarDPT analyzes macro data from national banks and stock market data, identifies recurring patterns in individual indicators – for example metal prices, the US money supply or exchange rates – and combines these into a market opinion. Our clients always receive the underlying patterns and indicators that have led to a particular positioning. This allows them to better understand the basis for their decisions and build confidence in the strategy. This approach applies to both equity and bond markets and underlines our commitment to transparency and comprehensibility.

In December 2024, the fund company Aramea launched a bond fund with AI technology. What exactly does the collaboration look like? Who is responsible for what?

The Aramea Intelligence Fund is a fund initiated by Aramea Asset Management AG, in which we act as technology partner. It is a European bond fund with a CaesarDPT overlay. Our AI sets the direction in terms of both credit risk and duration. Aramea’s experienced fund managers decide on the underlying portfolio and implement the Caesar signals. To this end, we have developed a white-label dashboard for Aramea. It enables them to see the signals and patterns of the most important time series in real time and to manage their investments accordingly. The aim is to use the AI signals to generate alpha in any market situation over the medium term.

Have you already gained any insights into the competition in this short time? For example, with regard to the risk-return ratio?

Absolutely: our “multi-headed strategy” with a human and a technical “brain” in portfolio management is already proving successful. Despite a challenging start to the market, we have managed the drawdowns excellently. After just five months, we are 150 to 250 basis points ahead of our competitors – a remarkable lead in the bond sector. The reduced volatility has also led to a significantly improved Sharpe ratio, further underlining our innovative portfolio approach.

What are the differences between private alpha and traditional asset managers or fintech competitors such as robo-advisors?

Private Alpha differentiates itself from both through our unique position as an enabler for institutional partners. Instead of focusing on direct asset management, we provide our clients – including banks, insurance companies and well-known asset managers – with high-quality AI financial research to support their decision-making and products derived from it. This enables them to cope with the international competitive pressure created by their competitors’ massive AI investments.

Switzerland is our main center for AI development and research, while our German subsidiary is in close partnership with Hamburg-based Netfonds AG, the largest and fastest growing liability umbrella in fund management. In contrast to traditional asset managers, we do not offer traditional portfolio management, but actively support them in the digital transformation so that they remain both customer-oriented and competitive.

Turbulent market phases in particular show how robust a system is. How has your AI reacted in the last few turbulent weeks? What have you learned from it?

Our systems have clearly shown how an external shock in the form of the US government and its rhetoric has affected the markets. As a result, most indicators weakened. In this very stressful market phase, it was important for us to be close to our customers and to disclose to them what we see in the data. We received some great reactions in return. Our experience in Swiss private banking has taught us one thing: crises are decisive moments. We strengthen long-term relationships of trust through clear, data-driven communication and proximity to our clients.

Let’s take a look into the future: What role do you think AI will in asset management in ten years’ time? What is your vision for private alpha?

In ten years’ time, AI will not just be a supplement, but the central driver of asset management. Data-driven processes are already supplementing human intuition today. In the future, machine intelligence will anticipate risks in real time, react to market changes and deliver customized strategies. With CaesarDPT technology, Private Alpha aims to become Europe’s leading platform for transparent, robust AI investment strategies and make them accessible to financial professionals via research, funds and white label solutions.

Thank you very much!

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Christoph R. Züllig is Founder & COO at Private Alpha and is responsible for the operational management and strategic development of the products and trading strategies. Previously, he was a partner and client manager in the development of CreditGate24 and before that Country Head Austria at Bank Julius Baer and in Private and Investment Banking at Credit Suisse and holds an Executive MBA in Digital Leadership & New Venture Creation. He also works as a consultant for several companies in the field of artificial intelligence and venture capital.