Artificial intelligence will open the door to a systematic approach in private markets.

That’s according to Raffaele Savi, global head of BlackRock Systematic, co-chief investment officer and co-head of systematic, who spoke on Goldman Sachs Exchanges: Great Investors podcast. Savi was interviewed on 29 July 2025 by Raj Mahajan, partner in global banking and markets at Goldman Sachs, who is responsible for helping to build out the bank’s capabilities for the systemic investing community.

This year BlackRock Systematic is celebrating its fortieth anniversary. Savi oversees BlackRock’s quantitative teams who have more than $317bn in assets under management across fixed income, equity and factor investing and he sits on the firm’s global executive committee. Savi had joined Barclay’s Global Investors in 2006 before the asset manager was acquired by BlackRock in 2009.

Savi said a fair amount of old-time practitioners are embarrassed by the hype around AI but he believes there are three interesting three concepts. The first is bringing scale as a big driver of success in the investment industry and the second is the universality of generative AI and large language models.

“The beauty of these language models is that they’re interactive and speak our language, he said. “ I can prompt them and you can prompt them, which has broadened the appeal and the applicability.”

As a result, AI and large language models can be used in more parts of the investment process. Savi said systematic investing has succeeded in liquid asset classes and over shorter time horizons. He believes AI will open the door for a systematic approach in investing in longer time horizons and in less liquid asset classes, such as private markets.

“We’re already doing a lot of systematic work in credit,” he added. “We’re using systematic to translate from macro to micro insights and that is a big trend for me.”

Savi believes systemic investing in private markets will become “the big market” over the next ten years.  Quantitative models in public markets have used prices, volumes, returns, fundamentals, and analyst estimates. He predicted that in 15 years state-of-the-art models will use different data sources such as product reviews, search trends , Instagram posts, interviews and various forms of human capital networks.

“All of this data is actually readily available for every company,” he said. “We realized that we were filtering out a lot of private companies out of these new data sources that we acquired.”

His team has developed products with colleagues in BlackRock’s private equity team that have a traditional fundamental investment approach to private equities.

“We’ve been able to partner and build something,” added Savi. “I think we’ll see much more of that in the market in the next ten years.”

As more investors have private assets in their portfolios, Savi said it will become more interesting and a more rewarding challenge to build an optimal public/private portfolio. He argued that quants are very well positioned to attack these challenges.

Savi also believes AI will help build safer portfolios, which he compared to safety engineering in cars, the automotive industry and aeronautics. He used the analogy of cars and aeroplanes not being faster than 20 years ago, but becoming much safer due to new technology. AI may allow portfolios to become resilient to shocks.

“I don’t think AI will get us any closer to the crystal ball but will create layers of safety so that events will be what they are,” Savi added.

In private markets, BlackRock closed the $12bn acquisition of global credit investment manager HPS Investment Partners on 1 July 2025. The HPS deal followed other acquisitions by BlackRock last year to expand in private markets – the purchase of Preqin, a.n independent provider of private markets data, and Global Infrastructure Partners (GIP), an independent infrastructure manager. BlackRock has a target of 30% of group revenue coming from private markets and technology by 2032.