We asked Magnus Dahlquist about his new role as Academic Coordinator. He also provides some insight about some of the most pressing themes in investing today, and sheds light on how Inquire Europe ensures diversity in the topics sponsored.
You are our new academic coordinator – tell us a bit about yourself and why you have been selected to fill the position on the board.
I obtained my PhD in 1995, so I have a nearly 30-year academic career. In this time, I’ve engaged in a multifaceted role that involved research, teaching, and administrative duties that serviced both my schools and the broader professional community. My primary focus lies in capital markets, often with an international perspective. This passion extends to both my research and my teaching commitments, particularly related to asset management. Even as a PhD student, I recognized the importance of maintaining a connection to real-world applications within finance.
I’ve actively participated in various investment committees and served on the boards of asset management firms. This dual perspective has allowed me to incorporate practical insights into my research and my teaching, something I hope to continue doing with Inquire Europe. Moreover, moving between the two fields, like I do at Inquire Europe, is incredibly fruitful as I’m able to engage with professionals in the field and gain valuable insights that I can bring to both my research and teaching. Finance is one of those fields where you really see a strong link between the two.
How will Inquire Europe address the striking need for further research on AI and machine learning in finance? It’s certainly not new to the discipline, but the mainstream application of it in other sectors has created a sense of urgency which didn’t exist before.
While the interest in data analysis has been present for a long time within asset management, the emergence of big data has emphasized the need for more advanced techniques such as machine learning. These methods, developed in both academia and practice, impact various aspects of finance, from risk management to asset strategies and even to corporate communications. I think it’s currently having an affect almost everywhere, but it’s still at an early stage.
At Inquire Europe we try to foster discussions on topics like machine learning, large language models, textual analysis, and handling big data challenges. In our previous seminar we were able to listen to several presentations on how to apply these methods that are being developed into practical situations. We chose AI as a topic for the seminar not only because it’s interesting, but also because we think that there’s a demand from the members.
Moreover, Inquire Europe’s recent call for research proposals has highlighted the substantial interest among researchers and practitioners in exploring topics related to machine learning and its applications in finance. Therefore, AI is something that is topical; both researchers and practitioners think about it and want to learn more. Inquire Europe serves as a platform where we can get practitioners and academics to meet and talk about these issues.
How does Inquire Europe ensure a diversity of topics are being sponsored? Is diversity amongst those who are carrying out the research – whether academics or practitioners – also considered?
I’m an economist, so I try to adopt an approach that considers both supply and demand. With regards to supply, we refer to topics that are popular among researchers and reflect what is happening in the academic world. With regards to demand, we ask for feedback from Inquire Europe members, ask what they find interesting, and what type of topics they would like to hear more about during the seminars. However, we prioritize high quality and practical relevance over trends that might turn out to be fads.
In my experience, Inquire Europe really seeks to promote younger researchers with some European connection and/or applied to a European setting. However, we don’t have explicit restrictions, as we recognize the potential significance of research conducted by younger researchers outside of Europe and on other international settings. We also want to take gender diversity into account, recognizing that a vast majority of scholars at top universities, and professionals in management firms, are men.
Inquire Europe still tries to ensure that merit and quality are most important when it comes to project selection, which involves a thorough review by a research committee comprising of academic advisors and practitioners, who assess proposals based on merit, relevance, and potential impact. While there is an emphasis on diversity, the institute maintains a commitment to quality, ensuring that sponsored projects are led by researchers with relevant backgrounds.
What are the major trends you foresee for 2024?
Besides the topics of AI and sustainability, which we’ve already discussed, I’d say the topic of inflation is still relevant. It’s true that it’s not as hot as perhaps a year ago, but the impact of inflation on various asset classes, not the least in traditional asset classes such as stocks and bonds, remains a subject of interest.
Secondly, the topic of private assets will be very relevant. Rising interest rates have increased the cost of financing for corporations and asset managers, affecting trading strategies and private asset investments such as venture capital, private equity, real estate, or credit. Consequently, there is a growing focus on understanding and moving towards investing in private assets, as institutional investors shift away from traditional asset classes. It’s no coincidence that the next seminar we’re going to have in the fall of 2024 in Valencia is dedicated to investing in private assets.
Thirdly, the geopolitical landscape is having important consequences for capital markets, with events such as the war in Ukraine and challenges in emerging markets like China influencing investment decisions. I think that geopolitical risks in the capital markets would be an interesting topic for a seminar in the future.