Hiromichi Mizuno was named chief investment officer of Japan’s Government Pension Investment Fund, the world’s biggest manager of retirement savings, in 2014. He has since led a push to increase equity holdings and advocated for incorporating ESG, or environmental, social and governance, factors into investing.
What are the biggest changes in the investment world you see coming in the next five to 10 years?
Mizuno: Adoption of technology, including AI and ESG integration into all asset classes. I believe artificial intelligence will be able to either replace or enhance the asset managers’ work, particularly for short-term trading.
What are the implications?
Asset managers have to adjust their conventional business model. Investors will be more focused on the long-term investment theme, as AI will take over the short-term trading. In other words, investors will shift their focus to the long-term sustainability of their portfolio, and more focus on their investment themes like ESG.
Do you see a lot of jobs being cut as a result?
I wouldn’t be surprised if a lot of people lose their jobs because AI replaced their routine. But I also believe in human wisdom. I think the long-term thinking and the ESG-like non-numerical, non-quantitative information will continue to require human interpretation. I believe AI will release the human resource to do something else.