As some categories of alternative data mature and become standardized in the investment research process, new research from fintech Exabel with active investment managers and analysts reveals that 76% of survey respondents believe consumer spending data will provide an ‘outsized’ information edge in the near future. This is followed by 65% who cited web, mobile and app usage data, and 58% who said employment and people moves data.
What were the findings of Exabel’s study?
| Alternative data category | Percentage of investment professionals who believe this will provide an outsized informational edge in the near future as the alternative data sector matures and becomes more standardised |
| Consumer spending | 76% |
| Web, mobile and App usage | 65% |
| Employment and people moves | 58% |
| Social listening | 41% |
| NLP and sentiment data | 32% |
| Satellite | 9% |
When it comes to which class of investors or types of investment strategies are seen as the most progressive or sophisticated in their adoption of alternative data, 66% of those surveyed said fundamental-focused funds/strategies, followed by 16% who said systematic, 7% who cited allocators, and 7% who said venture capital. Around 4% said private equity.
But in terms of the challenges that most frustrate active investment managers and analysts when working with alternative data, the top three are combining data from different sources (71% said this), processing raw data into a useable format (cited by 53% of survey respondents) and comparing different datasets that are similar (49% of those surveyed).
What do the findings mean for investors?
Neil Chapman, Chief Executive Officer Exabel said: “The alternative data market is making huge progress and the insights and trends they can show is becoming more important for investment professionals. Challenges remain in capitalising on the full potential of alternative data, but many of these are fading as technology evolves and the market matures.”
Exabel’s solution platform brings the investable insights from alternative data direct to investment teams, delivered on its cloud platform providing investment managers with unique insights using alternative data. Exabel works with market-leading alternative data vendors across the globe to assist them in productizing their data for investors.
