TCW Group, a US-based asset management company, has announced an expanded alliance with Microsoft to leverage artificial Intelligence (AI) in its investment strategies.
The collaboration is set to introduce novel solutions for complex front office functions, with a particular focus on enhancing portfolio management through the use of Microsoft Azure OpenAI Service, Azure AI Search, and Cosmos DB.
With a history spanning more than five decades, TCW manages a diverse array of investment products in sectors such as fixed income, alternative investments, equities, and emerging markets.
The firm operates one of the largest fund complexes in the US via its ETF suite, TCW MetWest Funds, and TCW Funds. Its clients include financial institutions, corporate and public pension schemes, endowments, foundations, high-net-worth individuals, and financial advisers.
A significant aspect of its partnership with Microsoft involves using AI to optimise the analysis and oversight of complex investments, particularly securitised products. These investments are often accompanied by elaborate documentation and intricate conditions such as varied regulations, investment restrictions, sustainability indicators, cash flow triggers, and default clauses.
Microsoft financial services corporate vice president Karen Del Vescovo said: “Azure OpenAI Service empowers our customers to navigate the complex analysis of securitised instruments.
“Scaling an organisation’s ability to review extensive documentation helps surface the appropriate information and checks for blind spots, ensuring adherence to investment strategies, client guidelines, and regulatory requirements. TCW is at the forefront of the investment management space by integrating these capabilities into their products, driving innovation, and benefiting all stakeholders.”
Through advanced AI technology, TCW is crafting scalable solutions that help investment teams effectively identify opportunities from a wide range of deals across different regions. This initiative aims to improve surveillance abilities and meet the operational needs of these sophisticated instruments while supporting informed decision-making in portfolio management.
TCW Group chief technology officer Manish Ghayalod said: “We have been investing heavily in advancing our digital capabilities, and working alongside Microsoft, we will be able to further extend these advancements to focus on high-impact portfolio management use-cases.
“This collaboration represents a bold step forward in our shared vision of a future where AI drives sustainable growth in an efficient and economical manner.”
The collaboration between TCW’s engineers and Microsoft’s data scientists is said to have already resulted in significant operational efficiencies. Building on previous successes in this area, the focus has now shifted to further exploring possibilities within the investment sector.
Earlier this week, TCW Group unveiled the TCW White Oak Emerging Markets Equity Fund (TWOEX/TWEMX). This actively-managed mutual fund is designed to achieve long-term capital growth by investing in a diverse range of equity securities from emerging market economies.
