A New Generation of Hedge Fund Managers Are Arriving

It’s estimated that in just the last two years that 90% of the world’s data has been created.

Each minute there were 3,607,080 Google searches conducted worldwide in 2017. Since 2013, the number of Tweets each minute has increased 58% to more than 455,000 Tweets per minute in 2017.

In the investment world knowledge is power. The proliferation of data is in the early stages of upending the hedge fund industry and rewarding those with the ability to access and make sense of large and alternative data sources.

Historically, data was structured and neatly organised in databases, and then came along the internet.

The Internet of Things (IoT) phenomenon is the major driver behind the shift, with sensors now in everything from home appliances through to the more sophisticated like the satellite orbiting earth. All the while, capturing data and transmitting it to the internet. Most of this is in an unstructured and more complex format than traditional datasets.

Satellite imagery can also be used to monitor the activity of oil rigs and GPS sensors can track the movement of ships exporting commodities to the major importing countries.

Sophisticated quantitative hedge funds are making use of this data rather than waiting months for the release of official government data.

Outside of sensors, data can also originate from individual processes (e.g. google search traffic or sentiment of news/blog articles) or business processes (e.g. credit card spending data tracking consumer spending behaviour).

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