OTTAWA — Sagard, an affiliate of Power Corporation, has recruited an artificial intelligence expert to help its investment funds and portfolio companies make use of the technology and navigate its impacts. 

The alternative asset manager announced Parinaz Sobhani as its new head of AI on Thursday. The computer scientist has experience applying AI to the business of investing; she previously held the same position at Georgian, a Toronto-based venture capital firm. 

The Desmarais family launched Montreal-headquartered Sagard in 2002. Today, the firm has $34.7 billion in assets under management, including real estate holdings, loans to biotech companies, and stakes in technology startups and scale-ups. Its funds have financed the likes of Boosted.AI, which makes tools for portfolio managers; Koho, which offers spending cards and accounts; and Wealthsimple, which operates a digital investment platform. 

Sobhani will work directly with Sagard-backed companies to add AI to their products or internal systems. “This is a very critical time for companies to figure out [their] golden use case,” she said. 

For example, Sagard’s Portage Ventures has a portfolio of fintech startups that could personalize their offerings for clients with AI. Companies can now buy access to large language models (LLMs) from providers like Cohere, Google or OpenAI to power chatbots and code-writing tools. Sobhani said she can help Sagard firms evaluate the offerings and choose the best, as well as head off potential downsides like hallucinations. 

Companies already selling AI might not need assistance at the product-design stage. But she will work with them to ensure their applications generate reasonable returns and use computing infrastructure efficiently. 

Sobhani had a similar remit at Georgian, which she joined as an applied research scientist in March 2017 while completing a doctorate in natural language processing. At the Toronto firm, she mainly worked with growth-stage companies. 

Sagard’s draw included its large portfolio and Diagram, a unit that launches new startups. “I realized the importance of really thinking about AI early on,” Sobhani said, noting doing so lets firms collect the right data and make the best use of the technology. 

Sobhani will not join the investment committee at any of Sagard’s funds, but her work will inform financing decisions. She will advise the firm’s asset managers about AI’s impact on specific industries and markets, and help identify early leaders and long-term winners. Sobhani may also participate in due diligence to assess the AI capabilities of potential portfolio firms, although she said the specifics of her role are still to be determined.

“Every single company out there is talking about AI,” she said. “‘What is real?’ is the next big question for many VCs.” 

Startups and scale-ups have faced a tough fundraising market for much of the last two years, but those selling AI are the exception. Major players and institutional investors have been drawn in by the generative boom, in particular, while VC firms are ramping up dealmaking in the space.

Sagard CEO Paul Desmarais III has touted the technology as a way for fintech firms to compete with incumbent financial institutions. “AI has actually increased the speed of the disruptors potentially getting clients [and] reduced the burn, because all of a sudden they’re able to do the same thing with less people,” he said at a Canadian Club event in Toronto in April.

Many Sagard portfolio companies have already adopted AI. Boosted, for example, uses LLMs to offer clients research on stocks; Wealthsimple uses them to assess data from customer service calls. 

Sobhani’s “extensive experience in AI and strategic vision” will help Sagard’s portfolio firms, influence its investment approach and help it adopt the technology internally, Francois Lafortune, a Sagard managing partner as well as co-founder and CEO of Diagram, said in a statement.

Sobhani will start her new role early next month. She hopes to build out an AI team at Sagard, as she did at Georgian. “The technology is moving so fast,” she said. “It’s such an important asset to have a team of practitioners that can quickly … see what is really impactful or not.”

Editor’s note: Francois Lafortune’s titles at Sagard and Diagram have been updated in this story.