Don’t hate the ESG rater, hate the very subjective ESG game. With the upcoming regulatory changes for investors to integrate ESG, we outline the specific issues investors should pay attention to. We also summarize the current state of ESG data, trends impacting the industry and the meaning of ESG.

A narrative dominates the media and news that we in the midst of a turbulent and unpredictable epoch. In other words, we are living through ‘uncertain times.’ Many people, academics, alt data providers, and investors alike, are asking themselves whether such text-based narratives can be distilled into a quantitative signal. In this intelligence piece, we demonstrate how economic indicators derived from unstructured news data have been variously used to assess Chinese labour market conditions and forecast Japanese inflation.

Following on from Part II in our healthcare series, which explored the application of machine-learning models to generate phase transition and approval predictions, we provide our view on the alternative datasets that pharma and biotech investors can use to augment their R&D pipeline analysis.

Slack, CrowdStrike, and PagerDuty – three SaaS companies have already gone public this year, and we are only halfway through 2019. For institutional investors that are active in this market, or simply curious about the space, we discuss some alternative approaches (and, of course, alternative datasets!) that could shed light on adoption, churn rates, recurring revenue, and acquisition costs of SaaS providers.

The growth of e-commerce has facilitated inflation tracking on a daily basis, namely from aggregating online pricing data. Moreover, the ubiquity of e-commerce in-itself is changing aggregate inflation dynamics. We believe product pricing datasets have a particularly potent use case in generating early inflation signals in opaque markets, such as LatAm, where official statistics are challenging to obtain. In this report, we review the academic literature that examines the behavior of online prices and its response to aggregate national shocks. We also outline where to find alternative sources of inflation data.

Cybersecurity risk ratings have recently drawn attention as a new player in the alt data arena. In this piece, we summarise the current academic status quo regarding cybersecurity breach incidents and financial market impact, before discussing the usability of relevant datasets from an event arbitrage and risk management perspective.

How much does alternative data cost? The million dollar question. We leverage our unique position in the industry and proprietary data on pricing to shed light on how much datasets really cost, which factors influence the price of a dataset, and whether funds are willing to pay the price for valuable datasets.

A structured database of companies that are filing for bankruptcy is a gold mine for institutional investors. Not only does it highlight distressed and/or turnaround investment opportunities, it can also be a valuable leading indicator to identify which other companies may soon share the same fate. For readers that are 1) actively searching for a bankruptcy database, 2) considering alternatives to the database(s) that they are currently subscribed to, or 3) simply curious about the space, we summarise a 2018 academic paper that details how to construct a company bankruptcy database using alternative data.

Using hiring activity data as a signal for future business growth is the most common investment use case for aggregating online job postings. But do other use cases exist for this type of data? For example, can it tell us a) how effective companies are at hiring highly demanded skills, b) whether any of their facilities have suspended operations or even c) a clearer picture of the economic activity in opaque markets? In this piece, we review the landscape of vendors providing job market data, outline possible use cases and discuss its limitations.

With great power comes great responsibility – or not? According to one academic paper, firm-level electricity consumption data provides a novel window into financial misreporting among South Korean firms. We discuss how an investor can take this use case from theory to practice with a number of alternative indicators for firm productivity.