Nordic Financial Solutions Oy

Portfolio optimization problems do not always have a solution. For a complex mandate, diagnosing infeasibility can become a substantial part of the portfolio construction workflow. In that circumstance, the combination of specialized optimizer diagnostics and generative AI can materially change the user experience.

AI is making it materially easier for portfolio managers to express an investment outcome in natural language rather than working through the complexities of optimizer settings, data mappings, objective-function menus, or lines of code.

Portfolio construction is entering a new phase. Over the past several decades, much of the innovation in portfolio construction has focused on the mathematics: richer objectives, more realistic measures of risk, increasingly sophisticated constraints, transaction costs, taxes, multi-asset class portfolios, and multi-period investment decisions. Those advances have made the underlying machinery much more powerful.