How do you distinguish substance from hype when managers claim AI implementation advantages?
In this week's The Institutional Edge, Angelo welcomes Chris Walvoord, recently the Global Head of Liquid Alternatives Research and Portfolio Management at AON, where he led a team of 14 supporting Advisory and OCIO businesses across hedge funds, private credit, and opportunistic investments. Walvoord provides a comprehensive framework for allocators navigating the critical challenge of assessing AI implementations in investment strategies, emphasizing that allocators don't need machine learning expertise to effectively evaluate AI claims. The conversation reveals practical methods for distinguishing substance from hype, identifying red flags, and conducting thorough due diligence on AI-enhanced strategies in an increasingly complex technological landscape.
In This Episode:
(00:30) Introduction of Chris Walvoord, former Global Head at AON
(01:15) Hypothetical systematic global macro manager using AI enhancement claims
(04:13) Beyond buzzwords: requiring specificity in AI tool explanations
(05:18) Talent requirements: specialized skills beyond traditional finance backgrounds
(09:41) Data importance: sources, curation, and quality assurance processes
(14:35) AI model types and techniques: understanding specific approaches
(18:45) Testing and validation: building robust models for commercial deployment
(25:10) Red flags in AI due diligence and governance frameworks
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Dr. Angelo Calvello is a serial innovator and co-founder of multiple investment firms, including Rosetta Analytics and Blue Diamond Asset Management. He leverages his extensive professional network and reputation for authentic thought leadership to curate conversations with genuinely innovative allocators.
As the "Dissident" columnist for Institutional Investor and former "Doctor Is In" columnist for Chief Investment Officer (winner of the 2016 Jesse H. Neal Award), Calvello has become a leading voice challenging conventional investment wisdom.
Beyond his professional pursuits, Calvello serves as Chairman of the Maryland State Retirement and Pension System's Climate Advisory Panel, Chairman of the Board of Outreach with Lacrosse and Schools (OWLS Lacrosse), a nonprofit organization creating opportunities for at-risk youths in Chicago, and trustee for a Chicago-area police pension fund. His career-long focus on leveraging innovation to deliver superior client outcomes makes him the ideal host for cutting-edge institutional investing conversations.
Resources:
https://www.linkedin.com/in/chris-walvoord/
https...
Chapters
- (00:00:00) - Due Dilution In Minutes
- (00:01:07) - Institutional Edge: On AI & Due Dilution
- (00:02:54) - Should I Buy AI-based Funds?
- (00:09:02) - Looking for Talent in Machine Learning
- (00:11:03) - Quantum Data and the Investment Model
- (00:12:31) - Quality assurance in the data
- (00:15:31) - The Art of Due Dilution
- (00:22:52) - Can You Override the Model?
- (00:26:17) - How do you know you didn't overfit?
- (00:27:31) - AI Due Dilution: Red Flags
- (00:31:56) - The Worst Asset Based Loan Pitch
- (00:35:45) - DISCLAIMER: This podcast is for educational purposes only
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