This post was first published on the Arcadia Data website.
Asset management firms increasingly leverage alternative data to enhance their investment strategies and gain an informational edge over the rest of the market. It is becoming the normal course of business to use new types of data in alternative ways and soon “alternative data” will simply be referred to as “data.” The ability for one firm to distinguish themselves from another depends on why they selected certain data sets over others and how they enable their subject matter experts to put alternative data to use.
In our previous post, based on the report, “Put Alternative Data to Use,” by Greenwich Associates and commissioned by Arcadia Data, we considered the types of alternative data used and desired by the buy-side community, how they measure return on investment, and how deeply they analyze it.
In this post, we expand on that research to understand the approaches used by hedge funds and asset managers to select data sources and how their people use it. Finally, we respond to reported roadblocks by describing the keys to a successful alternative data strategy.