By Sanford Bragg April 29, 2022
Macro boutique Exante Data, which provides analytic overlays to alternative data, is planning to launch a new venture targeted to retail investors. The new platform, MarketReader, will leverage technology to provide near real-time commentary.
MarketReader is a pure data/software solution, with no human overlay, designed to identify unusual market activity as well as catalysts for market movements. The beta site currently highlights stocks exhibiting return, trading volume or market cap changes that deviate strongly from averages from the previous 52 weeks. The next step will be to add additional asset classes such as cryptocurrencies and foreign exchange, and to implement algorithms to identify drivers of price action. Market data is currently supplied by Finnhub.io, which distributes a broad range of data including stocks, foreign exchange and crypto.
“We have big plans for democratizing investment research,” said Exante Data Founder & CEO Jens Nordvig in a statement. “We are used to helping the most sophisticated asset managers around the world, but we want to find ways to help a much broader audience too.”
MarketReader, Inc. is separate venture which will have its own management and advisory team. The new firm was co-founded by Nordvig, Exante CTO Web Begole and Evan Schnidman, the founder and CEO of Prattle, an alternative data firm acquired by Liquidnet in 2019. Prattle provided sentiment analysis on approximately 3,000 US stocks and on central banks from fifteen countries.
Jens Nordvig, a top ranked currency strategist, left Nomura in 2016 to found Exante Advisors, the predecessor to Exante Data. The initial strategy was to limit the firm’s core macro product a half-dozen macro hedge fund clients willing to pay $600,000 each for Nordvig’s insights. To scale his research business without diluting his core research product, Nordvig set up a data affiliate, Exante Data in late 2016, initially to analyze Chinese capital flows. In 2019 he restructured the firm, incorporating Exante Data and making it the primary vehicle for his research.
Retail research requires a very different business model from institutional research. Price points are much lower while sales and marketing are more complex. Exante has evolved from its original approach of charging a select number of hedge funds $600k entry fees but making the leap to retail entails the separate branding and organization that MarketReader is putting in place. It will also need separate funding. Exante has been able to bootstrap its growth up until now, but MarketReader is in the process of raising capital.
After the 2008 expiration of the $450 million subsidy for retail independent research established by the Global Research Analyst Settlements, there wasn’t much interest in retail investment research. Former hedge fund PM Keith McCullough founded Hedgeye in 2008, which now has a thriving retail component. CFRA, which had previously focused on short-ideas for hedge funds, bought S&P’s retail-oriented equity research business in 2016. Otherwise, not much…until recently.
Low trading commissions have boosted retail-level trading (viz. the meme stock trading frenzy) creating a tail wind for retail-oriented vendors. Recent startups like web data firm Quiver Quantitative are targeting the retail market. Relative newcomer Atom Finance has been gaining traction. More established firms like Zacks Investment Research, Seeking Alpha, Benzinga, Tipranks, and Stocktwits have built successful content-rich retail franchises that are benefiting from increased retail investment activity. MarketReader has a challenging journey ahead but not an impossible one.