Data should be AI’s next move: Insync

Yasmine Raso

Senior Journalist, Financial Newswire

4 August 2023

Insync Funds Management’s Chief Investment Officer (CIO), Monik Kotecha, has flagged the potential for investments in data to climb due to the advancements in generative artificial intelligence (AI).

Kotecha said with the release of AI-powered language models like ChatGPT which took the world by storm, it shows how disruptive AI can be for several industries than previously expected and expands its impact on where to invest – and where not to.

He highlighted an Insync portfolio company, RELX, that has a “distinct data advantage” and can be seen as a company set to benefit from the ongoing advancements in AI.

“We are heavily engaged in deep specialist research to gauge who will be empowered, what to avoid, and where the most significant value and differentiation lies,” he said.

“One key area of more immediate benefit is in data. What RELX does so well is gather, analyse, and deliver valuable knowledge and insights to businesses and professionals across industries globally, empowering people and organisations to make better-informed decisions.

“Similar to one of our other holdings, Adobe, it possesses multiple gargantuan databases that result in reliable and trusted sources of data its customers can depend on.

“Like all companies in our portfolio, both Adobe and RELX are highly profitable companies based on their Return On Invested Capital (ROIC), have a long runway of growth, modest levels of debt, substantial R&D, and are generating prodigious amounts of cash flow year after year.”

Kotecha said a select group of companies like Adobe and RELX have been historically known to deliver strong returns against the benchmark during periods of policy tightening and market volatility, like the current environment.

“We find they often maintain and even strengthen their strong competitive advantages during challenging times, and this enables them to consistently generate economic value even as the cost of capital is rising.”