Alternative data could be a rich source of alpha, both for quant firms and fundamental investors. Most asset managers, though, are handling it more like high-grade explosives.
So, what’s holding them back? When asked, most cite the risk of privacy violations.
“Everybody is petrified of bad publicity around this,” says Abraham Thomas, co-founder of Quandl, a data marketplace recently bought by Nasdaq. “Hedge funds don’t want to take personal identifying information onto their servers at all.”