“The disruptive power of technological innovation derives from its potential to create a better or cheaper product capable of growing a company’s market share or, indeed, a whole new market,” said Jeffrey Lin, co-manager of the newly launched M&G (Lux) Global Artificial Intelligence Fund. Photo: M&G Investments

“The disruptive power of technological innovation derives from its potential to create a better or cheaper product capable of growing a company’s market share or, indeed, a whole new market,” said Jeffrey Lin, co-manager of the newly launched M&G (Lux) Global Artificial Intelligence Fund. Photo: M&G Investments

Tapping into the multi-trillion-dollar potential of artificial intelligence as a transformative market force, M&G Investments has unveiled the M&G (Lux) Global Artificial Intelligence Fund, initially committing €93m (£80m).

M&G Investments has launched the M&G (Lux) Global Artificial Intelligence Fund, an actively managed equity strategy aimed at capitalising on the substantial investment potential within the field of artificial intelligence (AI). In a press release on Monday 22 January, M&G that in an era of rapid innovation and heightened competition, AI stands out as a long-term growth catalyst, and its disruptive influence is poised to significantly impact the global business landscape.

Referring to a McKinsey study, M&G highlighted that AI has the potential to contribute between $2.6trn and $4.4trn to the global economy annually, primarily through productivity enhancements and efficiency gains. To put this into perspective, these figures are comparable to the entire 2022 GDP of Germany, which amounted to €3.9 trn, or over 50 times Luxembourg’s GDP of €77.5bn. According to M&G, the widespread adoption of AI promises transformative advantages across various domains, encompassing improved decision-making, innovation, risk management and enhanced customer experiences, among other benefits.

Strategy

Initially, the M&G (Lux) Global Artificial Intelligence Fund will operate a portfolio consisting of 50-70 AI-focused companies. The fund will target opportunities within three distinct categories:

– AI enablers: These companies provide the essential technology infrastructure required to create AI solutions,

– AI providers: Focusing on businesses offering AI solutions to customers, and

– AI beneficiaries: Identifying companies that will leverage AI to enhance their products, services and processes.

The fund will be co-managed by Jeffrey Lin and Thomas Lee from M&G’s thematic technology equity investment team. It commences with an initial investment of €93m (£80m) from M&G.

Classified as article 8 under the Sustainable Finance Disclosure Regulation, the fund incorporates exclusions related to thermal coal and controversial weapons. It also imposes revenue limits on investments associated with specific social and environmental sectors, aligning with responsible investing principles, stated M&G.

Commenting on the launch of the fund, co-manager Lin emphasised the disruptive nature of technological innovation. He underscored the capacity of innovation to create superior or more cost-effective products that can capture market share or even establish entirely new markets. Lin’s extensive experience as a computer engineer and tenure in the investment industry positions him well to identify successful businesses in this domain, said M&G.

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