Thank you for the questions.
The survey resulted in some interesting feedback particularly in the area of current value vs perceived future value. Although alternative data has been a receiving a lot of attention, the survey and our own empirical work has shown that within the traditional institutional investment community, it is just beginning to be incorporated into investment processes. However, there is tremendous interest in testing various types of alternative data and, clearly, the value firms see is how it can help differentiate strategies.
The greatest challenges firms are facing is how to vet the vast quantities and types of alternative data as well as integrating it with their traditional core content (e.g., fundamentals, estimates, pricing) and then quickly determine if the data can lead to additional alpha or minimize risk. With so many alternative data options from both small fintech startups and large firms, the challenges are vast.
You’ll notice that Sentiment and ESG data are both seen as providing high value in the future. They both complement core content and provide actionable information. As we move forward on the alternative data journey, data that best complements core data and can be more easily integrated will continue to provide the most value.
Please feel free to ask additional questions and provide feedback. The forum provides an excellent way for partners, clients, academics and others to share information and ideas. We are excited to have launched it and with the activity.