Welcome to the first edition of Neudata Tidbits in 2021.

In this edition, we discuss the retail investing trading mania that hit markets at the end of the month, as well as the regulatory shuffle at the US’s top regulatory firms and the launch of Neudata Academy’s first training course.

WHO'S GOT THE ANIMAL SPIRIT?
Last week, it seemed like you couldn’t talk to a single person at work or in your personal life without hearing the words “retail investors”. Who are they? Where will they strike next? Is this another symptom of the rise of populism around the world, or is it just for the lols?

The growth of retail trading has been a major topic of interest for the buy-side this year. Starting in September, we noticed a huge spike in the number of requests we were receiving for this type of data — in fact, over 40% of our clients have expressed interest in buying or learning more about retail-investor-focused data in recent weeks. Firms have been very vocal about asking us what’s available and what new sources have been hitting the market. As a result, we’ve made a number of successful introductions between firms and data providers with relevant products.

Do you have a data offering that relevant in this space? Sentiment, web-scraped and clickstream data are all being used to track retail investing trends. If so, please reach out to research@neudata.co to tell us about it.

WINDS OF CHANGE
Earlier this month, President Joe Biden tapped Gary Gensler to lead the SEC, a move that signalled to Wall Street that his administration would look to regulate the financial services industry more strictly. According to market players, the alternative data industry could also feel the effects of a stronger regulator at the helm.

Stronger privacy regulations will affect the processes of sourcing and using alternative data for institutional investors. Funds will be placing a stronger emphasis on their compliance procedures and on making sure data is de-identified of personal data and doesn’t put them at risk for an insider trading event.

But what does that mean for companies selling data? Vendors should ensure they aren’t using material non-public information to build their datasets, which could put funds at risk of insider trading. Also, vendors must be more transparent over consumer consent, as demonstrated in several class-action lawsuits filed this year against data providers.

Last year the SEC placed a strong focus on web-scraped data, a trend we expect to continue in 2021. There are some moral, legal and philosophical questions surrounding the topic of web scraping, some of which were highlighted in hiQ Labs, Inc v.s LinkedIn Corp (2019). We therefore think it’s important for all vendors to be aware of trends in this space.

Because funds are becoming stricter on their due diligence, we believe it’s beneficial for all vendors to complete Neudata’s Due Diligence Questionnaire, which lets you pre-emptively answer a lot of the questions funds will ask and save yourself time in the data sales cycle.

NEUDATA ACADEMY LAUNCH
If you’ve recently logged on to your Neudata Provider account, you may have noticed that we launched a new training module specifically designed for data providers selling to the investment management world.

The training course consists of seven video modules and includes topics like how to price your dataset, how to make the perfect pitch during the sales process, and how to structure your data product to get the most interest from buyers. It also offers real case studies and tips from prominent data buyers at GAM Systematic, Lombard Odier, Blackrock and RAM Active Investments.

Neudata Academy is currently being used by data vendors who are new to selling into the investment management world and by existing providers who are using the materials to train their new hires and stay on top of the constantly changing marketplace.

If you’re interested in hearing more about Neudata Academy, please reach out to us.

PEOPLE MOVES 
Make sure you check out our people moves section, which recaps the latest job moves in the alternative data industry. If you want us to recap your new job or latest promotion, get in touch with Sondra at sondra@neudata.co.

28 Jan – Man Group, Wall Street Horizon, FactSet and more
21 Jan – Shipfix, OSSIAM and more
14 Jan – PIMCO, Prince Street Capital, Ascential and more
7 Jan – Point72, Marshall Wace, Numerator and more

Until next time,
Sondra & Saima