Alternative Data: 9 Key Thoughts and Predictions for 2022

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The following guest article was written by the team at Eagle Alpha, an alternative data aggregation platform that also provides supporting advisory services for data buyers and vendors.

As we approach year-end, the team at Eagle Alpha wishes to provide readers with our predictions for the alternative data industry for 2022. We look forward to being held to scrutiny this time next year on what proved correct!  

1. The ESG trend is not going away. Many ESG branded funds do not have alternative data expertise. This is not sustainable given client and regulatory demands. Also, the private equity industry is standardizing private company reporting to improve its data insights into private companies. Stay tuned.

2. European transaction data is going to receive more attention in 2022. Historically, there has been limited availability of consumer transaction data on pan European basis.  This has now changed in 2021.  

3. KPI’s for working with data are going to improve further. You can now prioritize within 3 days, receive trial data in 1 to 3 weeks and, with the right prioritization, achieve 20%  conversion from trial. Importantly, you can achieve this by combining a more reasonable level of internal resources with 3rd party solutions. There are some very compelling ‘last mile’ solutions arriving for entities that do not have advanced data skills. 

4. Data driven funds are going to continue to win the AUM race. One piece of analysis we did this year with EPFR showed AUM growth was over double in a 5-year observation window for advanced alt data funds versus benchmark. We believe this trend will continue. 

5. How buyers and vendors engage is going to get smarter. As we approach 2,000 or 3,000 datasets engagement needs to get more precise. The dataset you need may not be at a conference. Catalogues are too large to fully review for the median data buyer. Dataset search on platform, buyer and vendor profile matching and ‘digitizing’ advisory will evolve.

6. The app engagement category will be active. The App Annie fraud case this year has caused data buyers to reassess all offerings for compliance, pricing and data product differentials. Expect re-assessment and churn. 

7. The compliance team is a client alongside the data team. Our time allocation survey in May illustrated the challenges of data compliance. More compliance personnel are now logged in and utilizing the API. 

8. Industry consolidation will continue. This year we saw corporate acquisitions and investments involving traditional players like LSEG, Bloomberg and SIX and alternative data providers. We believe this type of consolidation will continue. 

9. Corporates will purchase more external and monetize more internal data. This trend will accelerate in 2022 as corporates realize the importance of data in decision making and their internal data as an asset. Consultants will be key in supporting this trend. Solutions to protect PII are compelling. 

Click on the following link to access Eagle Alpha’s 1st Annual Alternative Data Report – 2021. ​

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About Author

Mike Mayhew is one of the leading experts on the investment research industry. In addition to founding Integrity Research, Mike is on the board of directors of Investorside Research Association, the non-profit trade association for the independent research industry, and a frequent speaker on research industry trends and developments. Mike has over thirty years of research industry experience. Email: Michael.Mayhew@integrity-research.com

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