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Hedge Funds of All Sizes Are Using More Alternative Data, But Not Without Concerns, According to Lowenstein Sandler Survey

September 10, 2019

NEW YORK--(BUSINESS WIRE)--Sep 10, 2019--

Lowenstein Sandler announced today the release of Alternative Data = Better Investment Strategies, But Not Without Concerns, its hedge fund industry survey and one of the only reports addressing the topic. The survey, which found that over 80 percent of hedge funds are using alternative data in some capacity, is the first survey of its kind from the firm’s Investment Management Group.

The report was authored by Peter D. Greene, partner and Vice Chair of Lowenstein’s Investment Management Group, with contributions from Benjamin Kozinn, a partner in that group.

“It is not surprising to me that an overwhelming majority of funds are using alternative data,” said Greene. “What is interesting is how funds of various sizes are using it and how they plan to expand their use in the future. In a changing industry, it is more important than ever to learn what alternative data can do, while also acknowledging the limitations and concerns that come with using such data.”

Completed by C-level executives, data scientists, equity analysts, portfolio managers, and legal/compliance officers in the private funds industry, the survey assessed funds’ use of alternative data. Funds were grouped by size–less than $500 million, $500 million to $5 billion, and greater than $5 billion–to determine how data use, and concerns about it, differ at varying levels of asset value.

According to the survey results, 82 percent of hedge funds are already using alternative data in some capacity, and 75 percent of respondents are using it to make better investment predictions. With more funds using alternative data, the results evidence an increasing interest in using newer data sources such as web scraping and biometrics to stay competitive. But, factors such as new regulations and privacy laws, cost and time investment, and the ability to distinguish relevant information from large volumes of data could stymie those plans for growth.

Key findings from the report include:

Access Alternative Data = Better Investment Strategies, But Not Without Concerns.

About Lowenstein Sandler

Lowenstein Sandler is a national law firm with over 300 lawyers based in New York, Palo Alto, New Jersey, Utah, and Washington, D.C. The firm represents leaders in virtually every sector of the global economy, with particular emphasis on investment funds, life sciences, and technology. Recognized for its entrepreneurial spirit and high standard of client service, the firm is committed to the interests of its clients, colleagues, and communities.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190910006082/en/

CONTACT: Lowenstein Sandler

Stephen Kimmerling

skimmerling@lowenstein.com

KEYWORD: UNITED STATES NORTH AMERICA NEW YORK

INDUSTRY KEYWORD: PROFESSIONAL SERVICES DATA MANAGEMENT TECHNOLOGY LEGAL FINANCE

SOURCE: Lowenstein Sandler

Copyright Business Wire 2019.

PUB: 09/10/2019 03:57 PM/DISC: 09/10/2019 03:57 PM

http://www.businesswire.com/news/home/20190910006082/en

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