$100 billion controlled by 1 person

Matt Ober is a general partner at Social Leverage. Matt was most recently the chief data scientist at Third Point, where he built the data analytics and technology platform used to enhance the firm’s investment capabilities in equity, structured credit, venture capital and cryptocurrency.

We keep hearing that soon there will be a startup that’s worth $1 billion with one employee. 

I think we will soon see one person managing $100 billion. Here’s why: AI agents and advanced research tools are changing the game for hedge fund managers.

AI agents, data availability, data collection, computing — everything is changing so quickly. Every day, I am amazed by the startups I am meeting and what is possible with AI. Finchat, a Social Leverage portfolio company, is a great example. The speed at which they are releasing features, new data, and AI capabilities is mind-blowing. I can’t even imagine where they will be 24 months from now. 

I think we are going to see the ability for a hedge fund manager to manage $100 billion on their own while leveraging the latest in AI agents and research tools. The tools that are coming out or are already built are automating models, summarizing research and extracting insights and sentiment from transcripts. 

AI capabilities are making it possible to train a model on your historical notes, how you build convictions, and how you write investment memos, saving hundreds of hours per month on grunt work and research.I have seen what is possible with the tooling today. For example, Ethan Berk, a senior associate on our team at Social Leverage, has even trained an LLM to write investment memos based on our CRM of notes, pitch decks and transcripts. It’s scary good!

The future of investment managers will be lean, mean, alpha-producing teams leveraging the latest tooling. Will S&P Global, FactSet, Bloomberg and Morningstar be the winners in the investment management world? I think these firms will get stronger, given some of their data and workflow moats, but new entrants are bound to show up.

Data moats are becoming harder to maintain, the need for fewer people to build state-of-the-art AI-first financial research products is increasing, and what once took thousands of offshore employees to maintain will soon be managed by small, lean teams supporting billion-dollar hedge fund managers. The future looks exciting.

I used to require my data science team to have strong Python or R coding skills. If I were managing a data science team within a hedge fund now, I wouldn’t care about their coding skills as long as they knew which of the latest AI tools would allow them to conduct the necessary data analysis to get the answers we were after.

Skills are changing, the capabilities needed for success are shifting and the need for more headcount is changing — all positive developments. But they also require new thinking, new training and access to these tools. Those experimenting, testing and leaning into these advances are closer to becoming that $100 billion hedge fund with one human.