Welcome to the July edition of Neudata’s Tidbits for data providers.

This month, we discuss the types of datasets popular among quant funds and outline the ESG sentiment landscape. 

ALTERNATIVE DATA FOR QUANTS

Quantitative funds have been a driving force in alternative data adoption over the past 30 years, but not all datasets are appropriate for their investing strategy.  Although more and more datasets are coming on the market, quant funds generally have strict requirements for the data they trial and onboard, such as:

• Broad coverage of publicly traded companies (and ticker mapping)
• Significant data history (preferably 5+ years)
• Substantial historical data included in the trial
• Minimal lag and frequent updates
• Point-in-time data
• Reliable delivery infrastructure

Data vendors that are new to selling to the alternative data market may want to consider whether their data products meet these needs before targeting quant funds. With these requirements in mind, we believe the following dataset types are the most adopted among quant funds. 

• NLP and sentiment data –  investment use cases include relation extraction, semantic parsing, text summarisation and sentiment analysis for stock-based changes.
• Labour market data – can be used to forecast growth within public companies.
• Transactional data – to get a read on companies’ performance ahead of quarterly earnings based on actual consumer transactions.
• Location – to predict company performance based on footfall at bricks-and-mortar sites.

ESG SENTIMENT

In the first half of this year, we’ve seen an uptick in interest for ESG sentiment data from our data buyer clients. 

This data can identify the public perception of companies on material ESG issues and can provide early warnings of potential controversies. Sentiment data can also help overcome some of the challenges of slow-moving ‘traditional’ ESG data by offering more timely insights into a company’s sustainability performance and momentum.

Use cases for ESG sentiment data include:

• Risk screening/identifying ESG controversies
• Supply chain analysis
• Identifying opportunities for alpha
• Sentiment as a greenwashing tool

If you offer ESG data products, register for an account and list them on the Neudata platform so that they are seen by our institutional investor clients. To find out more about listing on the platform, please contact saima@neudata.co. 

MEET DATA BUYERS IN SAN FRANCISCO ON SEPT. 28

Though summer is still upon us, we’re already looking ahead to the end of September, when we’ll host our annual data summit in San Francisco. If you’re interested in generating sales leads among leading West Coast-based hedge funds, private equity firms, venture capital firms and corporations, please reach out to us at events@neudata.co to see how you can get involved.

Until next time,

Saima