MarketsMedia by By Rob Daly on 5/18/2017
Although alternative data sets are helping funds with systematic investment strategies, those funds that employ discretionary strategies are finding it harder to separate the new trading signals from the noise.
Much of it comes from the structure of the discretionary funds, which have separated their data science/quant research teams away from their portfolio managers, according to Leigh Drogen, CEO of Estimize and who participated in an alternative data panel hosted by Wall Street Horizon.
“They are left sending reports and Excel spreadsheets to the portfolio managers and asking them to buy in with P&L,” he said. “It’s almost like they were a sell-side shop.”
Even if a managing partner and head quant are convinced that new data sets can capture further alpha, the portfolio managers have to buy into it.
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