DWS Group has acquired a minority stake of 24.9% in Arabesque AI, in a move to develop sophisticated artificial intelligence (AI)-based investment solutions.
Details on the deal, which has already closed, have not been revealed.
London-based Arabesque AI is an investment advisory and technology company that combines big data, machine learning, and high-performance computing in portfolio management and predicts stock price developments.
It integrates environmental, social and governance (ESG) information in quantitative investment strategies to deliver long-term performance and reduce portfolio risk.
It is the latest step that DWS, which has €752bn of assets under management, has taken on its path to turn its asset management digital.
Last year, the firm acquired a minority stake in German Arabesque S-Ray, an ESG data provider, as part of its mission to strengthen its ESG capabilities and services.
With both companies, DWS has closed strategic partnerships to work on AI-based investment solutions.
The cooperation with Arabesque AI means that both parties intend to work exclusively on new projects together.
Making smarter decisions
Asoka Woehrmann, chief executive of DWS, commented: “We will be able to harness disruptive technology within the asset management industry for our advantage.
“In the future, the AI engine will deliver innovative signals that will help us identify additional alpha sources, and will enable us to make smarter decisions.”
Qasim Nasar-Ullah, co-chief executive of Arabesque AI, added: “AI will transform portfolio management, and has the potential to further the mainstreaming of ESG across global markets.”
At a press conference last year, DWS’s chief investment officer said that ESG will be its license to operate going forward.
Arabesque AI is majority-owned by the Arabesque Group, DWS said.