**London**: SaltLight Worldwide Flexible Fund achieved a 63.24% return for 2024, driven by strategic AI investments. Portfolio manager Torsten Asmus underscores the importance of adapting to evolving technology while addressing concerns over market valuations and potential economic shifts influenced by AI advancements.
In a recent update, SaltLight Worldwide Flexible Fund reported a strong performance in the fourth quarter of 2024 and for the entire year, with returns of 20.35% in Q4 and an impressive 63.24% throughout the year. These results come as the fund continues to adapt and strategise within the rapidly evolving landscape of artificial intelligence (AI) and technology investments.
The fund’s year-end letter highlights the importance of a long-term perspective in investment, contrasting the fleeting nature of daily headlines with the enduring significance of broader trends. SaltLight has been closely monitoring the AI technology landscape, which it sees as a pivotal period of opportunity, having shifted its investment strategies in alignment with this evolving sector.
Torsten Asmus, the portfolio manager, emphasised the significance of AI advancements throughout various correspondence, marking key developments from 2020 onwards. Initially recognising AI’s potential, SaltLight adopted a strategy likened to “selling shovels to hopeful prospectors in a gold rush” by investing in companies involved in AI infrastructure. Over the years, the firm has refined its strategy, at times expressing caution about high valuations within its AI infrastructure investments.
As the AI market matures, the current landscape reflects a burgeoning ecosystem with substantial capital expenditures from major tech companies. Notably, the total market capitalisation of leading AI beneficiaries, including giants such as Nvidia, Microsoft, and Google, has reached approximately $19 trillion, accounting for roughly 30% of the S&P 500’s aggregate market cap. These companies have been investing heavily, with cloud computing firms projected to spend over $1 trillion on AI infrastructure in the upcoming three years alone. A prominent indication of this commitment was the recent announcement by OpenAI regarding its ambitious $500 billion data centre project, named “Stargate.”
In light of the increasing national and global emphasis on AI, SaltLight has noted a strategic shift among world leaders, who recently convened at an AI summit in Paris to discuss the future of artificial intelligence. Concurrently, the United States government has been implementing tighter AI export controls since 2022 to maintain its technological supremacy.
Despite the positive trends in AI investments, SaltLight remains wary of high valuations in the US market, drawing parallels to historical financial bubbles, including the dot-com burst and the 1929 stock market crash. The fund posits that the outcomes of these markets cannot be predicted with certainty and that various scenarios could emerge reflecting differing views on the potential of AI as an investment.
The firm continues to analyse the investment landscape through the lens of Carlota Perez’s theory, which articulates that significant technological epochs typically span decades and consist of distinct phases, including both installation and deployment periods. According to Perez, the installation phase is marked by initial enthusiasm, often leading to a frenzy where the correlation between high valuations and economic fundamentals begins to break down.
Within this framework, SaltLight identified AI as fundamentally transformative, shaping the competitive dynamics between human and artificial intelligence. As investment opportunities in AI software increase, the company believes that understanding the trajectory of technological advancement will be crucial for positioning within the market.
The fund’s letter emphasized two significant topics: the evolution of AI and its practical applications. SaltLight noted an unprecedented leap in AI’s capabilities, attributing advancements to developments in reasoning models and AI agents. These developments suggest that AI technology is transitioning toward real-world utility, enhancing productivity within enterprises.
Overall, SaltLight remains vigilant regarding potential over-optimism in the market while simultaneously maintaining an optimistic outlook on AI’s long-term growth potential. With its focus set on 2030, the fund continues to reshape its portfolio in response to the evolving cluster of technologies redefining the global economic landscape. The management team at SaltLight, led by David Eborall, underscores its commitment to closely monitoring these shifts, inviting investors to share in its journey through this transformative technological epoch.
Source: Noah Wire Services
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