Uncovering alpha through data innovations
S&P Global Market Intelligence: Best Data & Analytics Provider — Data proved more crucial than ever for asset managers over the past year, as markets reacted to a global pandemic, damaged supply chains, and recent vaccination drives.
This backdrop caused many asset management firms to hunt for new sources of data, as well as ways of managing their increasing data load, according to Teddy Kahn (pictured), Global Global Head of Investment Management at S&P Global Market Intelligence.
“Rapidly moving markets, continued fee pressure, and changing client demands has resulted in asset managers looking to new sources of data and solutions in an effort to differentiate their investment strategies and uncover alpha,” comments Kahn.
In particular, there has been “tremendous growth” in the firm’s Data Management Solutions business over the past year, with users looking to consume data through the data feed, API and cloud delivery platforms.
Kahn notes that the push for better accessibility was accelerated by the pandemic. “Moreover, as our clients all had to work from home, the flexibility of our delivery was a key value driver as our customers looked for stable, web-based applications and access points to critical content.”
He says that clients are looking for faster and easier ways to access their data, so that they can spend more time on alpha-generating initiatives.
“The explosion of data availability, coupled with the capability to consume and utilise this new information along with the technology infrastructure available to manage and support all of this new content, has enabled asset managers to seek new and innovative ways to generate alpha and mitigate risk.”
Kahn says that new data is throwing up new challenges for asset managers. “As data is now readily available from many different sources and different vendors, linking all this content together is a critical challenge for investors,” he says.
In May 2020, the S&P Global Marketplace platform was launched, allowing clients to explore and discover value across more than 200 datasets in a single standalone offering. This includes S&P’s Trucost Environmental data and climate analytics, which provides asset managers with a comprehensive ESG solution.
Asset management is also seeing a shift away from traditional tools that they used in the past to analyse data and uncover investment signals. Many clients are moving to the cloud, which Montalbano says provides an alternative solution that allows them to analyse new data sources faster.
Another challenge comes from the scope and type of new data available. “Many of the new data sources available today are semi-structured or unstructured, and massive in size. As clients work to ingest and merge new data sources with their current data in an effort to gain additional insight they’re finding it difficult and/or inefficient,” notes Kahn.
Kahn points to the growing interest in textual data. This historically required individuals to read through documents manually, but can now be done by machines. This is spurring many investment managers to use newer tools and technologies such as Python, R, and Tableau to improve their workflow efficiency, which they expect to be seamlessly integrated with the plethora of new tools available from vendors.
Looking ahead to the second half of the year, Kahn says: “The asset management industry will continue to become increasingly competitive and the need for diversified, alpha generating or risk mitigating strategies remains core to the mission of all asset managers.”
The firm’s focus will be on its alternative data strategy, with plans to grow its suite of textual and ESG data, as well as enhancing its traditional offering. The firm’s artificial intelligence arm, Kensho, will also continue to power new solutions to help clients maximise the value of their data for tasks including entity linking, speech-to-text, or identifying entities within text documents.
Teddy Kahn, Global Head of Investment Management, S&P Global Market Intelligence
Teddy Kahn joined S&P Global Market Intelligence in 2006. He is a Vice President leading the investment management segment across S&P Global Market Intelligence. In this role, he is responsible for product strategy and market development for our fundamental and quantitative investment management products including the S& P Capital IQ desktop, data feeds and ClariFI. Teddy also looks after the commercialisation of S&P’s leading AI/Machine learning solutions power by Kensho.