A multibillion-dollar industry offering unusual data such as satellite imagery and measurements of social media sentiment is enjoying a boom in demand as hedge funds and companies hunt for clues on how to tackle the coronavirus crisis.
Many investors have turned to so-called alternative data — niche information beyond standard financial market indicators or statistical releases — after finding official numbers too slow in reflecting the collapse in economic activity due to Covid, and the recovery. Providers argue it can provide precious, real-time glimpses into how a company or economy is faring.
“Absolutely, without a doubt, over the last six months the demand has skyrocketed,” said Hinesh Kalian, director of data science at hedge fund firm Man Group, which shepherds $104bn in assets. “There has been an increase in alternative data providers approaching us, and an increase in our investment team’s interest in these data sets.”