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Every company in the world is incorporating artificial intelligence (AI) capabilities into its systems and products with the hope that the technology will pay off in profits at some point. This is already visible in the German online marketplace, Scout24 SE, which has so far witnessed significant growth as a result of AI.
Scout24 SE Harnesses the Power of AI
Investment has proven to be more about the bigger picture and unique ideas. Because of this, not every company that seems to be on top of the trend gains in value at the end. One top-performing global stock fund is reaping the rewards of the AI trading frenzy by seeking out some unusual ideas.
Nick Cregan of Fairlight Asset Management makes investments in businesses that he thinks will benefit from AI or will be effectively shielded from its effects. He is not drawn to businesses riding at the top of the AI wave. Instead, he looks at how the company has fit the technology into its operations and what improvements AI has made to the company’s numbers.
“We’re not trying to pick the winner in AI, we think that that’s a mug’s game,” Cregan said in a phone interview with Bloomberg.
“You’re going to have some leading companies, which you think are going to be the winner, and then all of a sudden there’s gonna be some interesting technology that emerges that completely displaces that business,” he added.
By focusing on undervalued small and mid-cap companies that are set to benefit from the AI revolution, his Fairlight Global Small & Mid Cap fund has increased by 24% over the past year, outperforming 97% of peers, according to statistics provided by Bloomberg.
The fund has not only outperformed the MSCI World Small & Mid Cap Index consistently but has also demonstrated remarkable gains in the past month (3.6%), 3 months (9.2%), and 6 months (9.2%).
Scout24 SE AI Adoption Propels it to Global Map
One of the biggest companies in Fairlight’s portfolio is Scout24 SE, which operates ImmoScout24, the leading platform for residential and commercial real estate in Germany. The business also runs AutoScout24 which helps sellers find buyers for cars.
The company integrated AI into its systems for personalized recommendations of houses or cars with similar characteristics to the ones customers are looking at. This prevents spamming and helps customers in the search for what they need.
Scout24 has used AI in multiple other ways such as to estimate prices for cars and houses. AI should help the company drill into pricing and analyze market trends but is unlikely to replace the site’s uploaded inventory and customer base, Cregan said.
According to him, AI will only help the company’s site and pricing function to be more efficient as it is already the leader in the market.
Unconventional Investing Pays Off
Another notable company that has piqued Cregan’s interest is Copart Inc. This is a US-based auctioneer website with a focus on wholesale and repairable autos. The company which operates in 11 countries including Canada, the UK, Germany, and Ireland helps car sellers such as insurance companies and rental car businesses sell their cars.
In part due to the implementation of AI, Copart Inc. has grown remarkably seeing a 43% increase in 2023. The company’s embrace of AI is driven by similar motives, that is to leverage emerging technologies for enhanced operations.
Copart has utilized AI to improve its auction procedures with the aim of strengthening its industry competitive edge as the technology develops.
Since its launch in 2018, the Fairlight Global Small & Mid Cap fund has placed a strong emphasis on shares with appealing small- and mid-cap prices. This has been a big contributor to the fund’s success.
Currently, small and mid-cap companies are valued at historically low levels, which makes investing opportunities even more appealing. Furthermore, Fairlight’s strategic distribution of cash holdings to almost nothing shows the fund’s faith in the current state of the market.
Fairlight Asset Management has focused notably on opportunities in Germany and the United Kingdom, demonstrating their dedication to investigating various regions for future expansion.
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