We arranged this interview with a provider of crawled data. The vendor provides Data-as-a-Service on a bespoke basis giving clients access to open-source intelligence.
It depends on how many firms a given dataset has information on. Credit card transaction data has been known to provide a strong signal on revenues as many firms and many users are covered.
I've seen what appears to be an inflection in the last few weeks and months, so I'm not sure the question is apt. I think the biggest reason asset managers haven't taken advantage of alternative data has simply been the underperformance of the industry overall in the past 12-18 months.
Quants and quantamental firms have been leveraging alternative data for years. Why haven’t more firms with fundamental strategies started alternative data pods / teams?
Joseph Hooley, chairman and CEO of State Street Corporation, in a recent article for Institutional Investor gave three examples of how investors can use alternative data sources to identify new opportunities as well as potential risk exposure:
Fundamental data can often be a lag or at best coincident indicator of an asset value, but when combined with alternative data such as investor positioning/sentiment we can build a much clearer outlook for future price direction.
Matt Granade stated that alternative data is useful for generating new alpha. He said: "It is a real change from how investing used to work."
Braxton Mckee, CEO of Ufora - a data consulting and technology company - explained what signs indicate that a hedge fund is taking Big Data seriously.
Gene Ekster, CFA is Eagle Alpha’s advisory board member who works with asset management firms and data providers in a consulting capacity to help integrate alternative data into the investment process.
Tonia Ouellette Klausner, a partner with Wilson Sonsini Goodrich & Rosati, and a member of their Internet Law and Strategy Group, explained how buyside firms are using web crawling software and how legal risks could be mitigated.
Eagle Alpha gathers alternative data sources to analyse the Auto Industry in different ways, some details are described in our case study.
Daniel Goldberg is Eagle Alpha’s advisory board member who ran TangentDS – a company which turned email receipts into actionable insights. Prior to this, Mr. Goldberg was an analyst at Hunter Global and Bear Stearns.
