State Super moves to add machine learning tools

Australia's State Super has hired Neuberger Berman LLC for an equity mandate and to help the fund accelerate development of data science and machine learning tools that can complement its more traditional investment capabilities. The move reflects continued concerns that conventional approaches to managing the Sydney-based fund's A$44 billion ($30.2 billion) portfolio may not meet the moment in unconventional times. "My biggest concern is what happens if the market is behaving in an abnormal way," outside of the industry's knowledge base and modeling conventions, said Charles Wu, State Super's deputy chief investment officer and general manager, defined contribution investments, in an interview. In that regard, Mr. Wu said the emergence of negative sovereign bond yields three years ago was a warning bell. In the current environment, "a different way of thinking is required" and machine learning -- with its potential to come to a problem without prejudices or preconceptions -- can help State Super's team navigate a world growing evermore different from the one everyone has been trained to think about, he said.