How Investors Purchase and Use Alternative Data
Jobs in Alternative Data
- We know of one large fund with a team of almost 50 people working on alternative data. They have people to source it, vet it, make reports, do analysis, etc. etc.
- Matt Ober, who used to work at WorldQuant used to make $200k and then he was poached by ThirdPoint and is now apparently making $2M there. We only know this because he’s getting sued by WorldQuant.
- One hedge funds we know of is looking for a data scientist to work with alternative data. The pay for that is $250k to $400k.
- We’ve heard of one hedge fund that has a backlog of about 2000 potential data providers. They have yet to go through this whole list and that’s what we’re trying to help with.
- BlackRock is literally advertising right now a position called “Data Hunter”
- Some traditional data providers, like FactSet, know that their data is getting more and more commoditized. One thing they’re doing is they’re also going out and sourcing alternative data providers and actually bringing them more into the FactSet ecosystem.
- Based on the job postings, we see people sourcing alt data fall into these categories:
- Specialized alternative data people
- Repurposed market data people
- Data scientists who are tasked with finding the data in addition to analyzing it
- Some risk management departments have been looking into alternative data
Until recently, the major users of what we call alternative data were typically quantitative funds. There were a few firms that would purchase certain types of alternative data but most funds relied on company financial statements only. As more and more data becomes available, we have seen a surge of interest from fundamental investors across the board from small hedge funds to large asset managers.
- Predict next quarter’s revenue numbers
- Anomaly detection vs. competitors. One day might have seen a surge for one company vs. others