This blog is based on a webcast hosted in partnership with CAIA Association, where Eagle Alpha spoke alongside strategic partners onefourzero about using alternative data for deal origination and due diligence. The Alternative Data Landscape for Private Equity If we...
Data science and engineering teams at 10 buyside funds completed surveys over a two-week period in August 2021. Although the survey sample is small, there is a great similarity in respondent profiles. This report breaks down the responses by Methodology, Challenges, Storage & Compute Infrastructure, Data Delivery, and ETL & Dashboarding.
On 14th September 2021, the Securities and Exchange Commission (SEC) brought a securities fraud ruling against leading mobile app data provider App Annie and its co-founder and former CEO and Chairman Bertrand Schmitt. The SEC found that at this time the company was “engaging in deceptive practices and making material misrepresentations about how App Annie’s alternative data was derived” that violated anti-fraud provisions of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
In the ESG landscape, some of the pain points for asset managers, are a lack of comparable, high-quality, high-frequency raw data, a lack of standardized definitions of sustainable activities, conflicting ESG taxonomies, and divergence in scoring methodologies across traditional ESG data vendors. This conundrum remains despite a proliferation of ESG data vendors since current ESG scoring methodologies are limited
by voluntary and sparse non-financial input data and must be supplemented by alternative datasets such as events data, real-time data, satellite imagery data, traditional and social media data, all of which capture material issues and events not reflected in a company’s financial and regulatory filings. Extracting, evaluating, and standardizing these alternative datasets require significant manual effort, creating strong incentives for the use of machine learning (ML), artificial intelligence (AI), and natural language processing (NLP) techniques.
With an increasing number of internet users moving away from traditional internet channels like desktop computers and towards mobile-only use, app usage data can offer hugely valuable insights into consumer behaviour and company performance through a variety of key performance metrics.
To evaluate all the components of the S-Pillar, the paper will review social data vendors in 3 parts: Part I: Social Capital, Part 2: Human Capital and Part 3: AI & NLP for Social Analysis. There is no one vendor that covers all categories of social data in detail. This report aims to help readers identify and understand which vendors can cover each of the social categories, what regions they cover, the granularity of the datasets and other key metrics of these data vendors’ datasets. With the introduction of new sustainable finance disclosure regulations and taxonomies from the UN and across the EU, North America, and Asia, it is more important now than ever to understand ESG data and where investors can source reliable ESG data.
Mandatory and non-mandatory ESG reporting obligations vary massively by region. Researchers have highlighted 1750 sustainability reporting provisions across 60 countries worldwide. And these reporting regulations are in constant flux. Just this year both the EU and the SEC in the US have signalled their intention to tighten non-financial disclosure requirements, though we are some way off a single harmonized global system. The shifting and inconsistent requirements have increased the importance of alternative datasets from independent third parties when assessing the ESG credentials of an investment.
Defined as non-traditional data that can be used in the investment process, alternative data has gained increased attention in the investment industry over the last decade. Essentially alternative data has come to describe data outside of market data such as market price data, tick data, volume and fundamental data. Alternative data has been gaining popularity over the last decade with surveys suggesting up to half of buyside funds are using it.
Alternative data users were once limited to quant funds, but it is not just buyside firms that stand to benefit from the surging availability of alternative data sources. Very soon alternative data users included other financial services firms and verticals including private equity and corporates (the latter refer to it as “external data”).
Alternative data opens the firm to new opportunities and sources of alpha or insight, but it also potentially opens the firm to new risks. To come to grips with this surging demand, legal and compliance teams on the buyside have had to upskill and educate themselves on considerations unique to alternative data. Compliance teams now need to place much greater emphasis on concepts such as data provenance and anonymization techniques.
This paper encapsulates Eagle Alpha’s eight-plus years in the alternative data industry, and particularly the last two years of monthly webinars and regular articles in partnership with our legal partners, New York law firm Lowenstein Sandler. The paper is underpinned by content in Eagle Alpha’s vast legal and compliance library which we highlight at the end of each section. Footnotes are provided for any third-party content used in the report.
24 buyside funds with varying levels of alternative data experience completed detailed surveys over a three-week period in May 2021. This report breaks down the responses by Spend and Growth, Innovation, ROI, Dataset trials, Challenges and more…
As a leader in the alternative data space, we make it a priority to stay up to date with legal and compliance issues across the alternative data landscape. A recent ‘Spotlight’ paper we published called Data Privacy and Alternative Data focuses on the data privacy movement and how it has developed over the past several years. In this paper we discuss the restriction around data collection and distribution being implemented both at a state and regional level as well as a company level where “Gatekeepers” are proving to be more influential than ever. This blog provides a run-down of several of the most noteworthy pieces of legal and compliance mentions from the paper.