Investors continue to seek out new ways to access alternative data to make the best investments and get the most return. In fact, Private Equity firms spend an average 1-5 million dollars on alternative data providers every year. For 2023, it has been reported that 80% of firms have a larger budget to invest in alternative data platforms than prior years as they continue to find new and valuable ways to leverage the data.
With so many different providers on the market it can be hard to determine which providers will have the most impact on your firm's investment strategy.
Before we dive into examples of alternative data providers, let’s answer some common questions:
What are examples of alternative data:
Alternative data includes a variety of different sources such as: satellite imagery, social media activity, credit card transactions, weather patterns, and other types of non-traditional data that can provide valuable insights into consumer behavior, market trends, and other factors affecting businesses and industries.
How is alternative data generated:
Alternative data providers typically use advanced data analytics and machine learning techniques to extract insights from large and complex datasets. These insights can inform a wide range of business decisions, such as identifying investment opportunities, evaluating risks, and optimizing marketing strategies.
How is alternative data used:
Private equity firms use a variety of alternative data providers to gain insights into markets, industries, and companies. In addition to alternative data providers, private equity firms use in-house data analytics that are capable of customizing data solutions to gain insights into specific markets, industries, and companies. Alternative data providers offer a wide range of non-traditional data sources and analytical capabilities that can provide valuable insights to the firm and their decisions. By leveraging these platforms, private equity firms can make data-driven decisions that align with their investment strategies and objectives and stay competitive in their respective markets.
Here are some examples of alternative data providers that are commonly used by private equity firms for a variety of investment industries:
1010data provides a cloud-based platform that enables users to access and analyze alternative data sources, including credit and debit card transactions, web browsing activity, and social media data. The platform includes tools for data analysis, visualization, and integration with various programming languages.
Eagle Alpha provides access to alternative data sources for various industries, including consumer goods, financial services, and healthcare. Its platform includes tools for data analysis, visualization, and integration with various data management and analysis platforms.
FactSet provides a range of data and analytics services, including alternative data sources, for investment professionals. Its platform includes tools for data analysis, visualization, and integration with various data management and analysis platforms.
Predata provides a platform for analyzing social media data to identify emerging market trends and geopolitical risks. The platform includes tools for data analysis, visualization, and predictive analytics.
S&P Global Market Intelligence provides a range of data and analytics services, including alternative data sources, for investment professionals. Its platform includes tools for data analysis, visualization, and integration with various data management and analysis platforms.
The cost of each provider will vary but ensuring that you’re buying the right product for your investment research is crucial. Concertiv's Market Data team are experts in knowing which alternative data providers have the best products depending on the industry of the investment your firm is interested in, as well as which information will be the most impactful. Concertiv's Market Data offering includes the industry insights of what other private equity firms are using what alternative data providers and are having the most success, along with ensuring that the pricing is in line with industry standards per seat.
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