Lowenstein Sandler announced the release of Alternative Data: The New Oil for the Digital Economy. 2022 Lowenstein Sandler Alternate Data Report. The survey, the firm’s investment management group’s third annual survey of the development of this market, found that there is a growing demand for alternative data not only by hedge funds, but also by private equity firms and venture capital investors. Ok. Alternative data is generally defined as information not included in company filings, press releases, analyst reports or other traditional sources.
This report was authored by Scott H. Moss, Chair of Lowenstein’s Fund Regulatory & Compliance practice. Boris Liebermann, Co-Chair of the firm’s Derivatives and Structured Products practice. and George Danenhauer, an advisor to the firm’s investment management group. The findings are based on a survey conducted by Ovation MR of executives, data his scientists, equity analysts, portfolio his managers, and legal/compliance personnel.
Their responses indicated that the popularity of alternative data “has skyrocketed in recent years,” with its global market expected to grow from $4.49 billion to $149.1 billion.
Other key findings from the report include:
- Nearly 80% of current users plan to increase their alternative data budget in 2023. Private equity firms and venture capital investors appear to be planning to increase spending more aggressively than hedge funds.
- Nearly three in four alternative data users report spending between $1 million and $5 million annually on alternative data. On average, private equity firms spend slightly more than hedge funds, $1.3 million and $1.1 million respectively.
- Investors continue to look for new and creative sources of alternative data such as satellite imagery, geolocation data, biometric data, online job listings, credit card transactions, app downloads and website traffic.
- Only a minority of investors have no plans to deploy alternative data in the near term, an even lower percentage than in the 2021 survey. 29% of respondents who said they currently do not use data said they have used alternative data in the past. And from the next 6 months he is expected to do so again in 12 months.
Scott Moss says: ”
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