Bridgewater Associates to focus on machine learning

Bridgewater Associates has plans to start a new, artificial-intelligence unit next month with a team of six reporting to David Ferrucci, who joined Bridgewater at the end of 2012.

Ferucci came to the company from IBM, where he led the team of engineers who developed Watson, the computer that beat human players on the television quiz show “Jeopardy!”.

Quantitative investment firms are increasingly hiring programmers and engineers to grow their artificial-intelligence staffs. Machine learning gives hedge funds a competitive advantage in markets where trading has been handicapped by rich asset prices.

The artificial-intelligence unit will make algorithms that make predictions based on historical data and statistical probabilities.  As markets change and adapt to new information, the programmes will learn.

Gustavo Dolfino, chief executive officer of recruitment firm WhiteRock Group, said: “Machine learning is the new wave of investing for the next 20 years and the smart players are focusing on it.”