Eagle Alpha enables owners of “alternative data” to monetize their data in the asset management vertical.
The Data Monetization Revolution
According to Goldman Sachs Asset Management in 2010 the world entered the fourth revolution, namely the ‘Data Revolution’. The Data Revolution enables owners of data to increase revenue through commercialization opportunities. According to a Forrester survey there are already 48% of companies commercializing their data. Indeed, according to McKinsey, data monetization seems to correlate with industry-leading performance.
Asset Managers Need Alternative Data
Asset managers are constantly seeking an edge in finding alpha. The problem is that asset managers all have access to the same traditional information and data, which is therefore commoditized and increasingly difficult to derive alpha from. Asset managers are now looking to alternative data to give them an edge in finding alpha. We define alternative data as non-traditional data that can be used in an investment process.
There are five key benefits for asset managers that integrate alternative data into their investment process: 1) greater volume of data and information; 2) unforeseen insight; 3) competitive edge; 4) fiduciary duty; and 5) efficiency.
Spend by asset managers on alternative datasets is forecast to rise to over US$2bn, according to Opimas. The category that has the most accuracy and highest spend is consumer transaction data. However, based on Eagle Alpha’s proprietary analytics and surveys we expect spend on B2B datasets to increase significantly in the coming years.
The Commercial Opportunity For Your Data
There are eight factors to consider regarding the pricing of a dataset: 1) the dataset itself; 2) micro vs. macro; 3) quant vs. discretionary; 4) ROI / ROD; 5) license structure; 6) comparables; 7) be realistic; and 8) feedback from targets.
There are five factors to consider regarding the number of asset managers that a dataset could be sold to: 1) does a vendor offer exclusivity; 2) what types of asset managers can a vendor sell to; 3) what asset classes is a dataset relevant for; 4) should a vendor sell to the sellside; 5) what routes to market does a vendor use.
The above factors are based on Eagle Alpha’s experience since 2012 and specific advice from asset managers.
- Create an additional revenue stream by selling to money managers. Note: don’t sell data to the sellside (investment banks) or this revenue stream will be canabalised.
- Eagle Alpha can evaluate your data and provide feedback on its applications and marketability.
- Eagle Alpha will prepare investor relevant marketing materials including examples of use cases.
- Eagle Alpha will raise awareness about your data through articles, interviews, research reports and presentations to potential customers.
- Eagle Alpha’s dedicated salesforce will ensure that your data is well represented.
- Additional revenue drops straight to your bottom line.