Quants split on who wins in the alt-data gold rush
Scale helps in handling new data, but alpha may be found in niche strategies
Big and small firms may struggle to profit from alternative data – but for different reasons, quants have said.
Heftier shops, with their dozens of quant researchers and stacks of computer servers, are better equipped to process the wave of new data available to investors. However, smaller firms could do a better job of foraging for morsels of alpha, and, more importantly, working up novel strategies that may be too small to interest bigger rivals and easier to keep as a secret for themselves.
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