November 30, 2021 | Stamford, CT — With logistics bottlenecks disrupting the performance of companies around the world, institutional investors are seeking new sources of alternative data on supply chains to help inform future investment decisions. 

“Alt data” are new, unique data sources that can add valuable explanatory power to both quantitative and fundamental investment models. Coalition Greenwich recently spoke with asset managers in North America and learned that 44% of institutional investors now use alt data and another 24% have plans to start in the near future.

As they do so, 48% of the investors say they plan to source alt data on supply chains, and another 41% plan to employ alt data on the related category of logistics.

“Those percentages make supply chain by far the most popular topic for alternative data right now, well ahead of other categories like business-sector performance metrics, search trends and social media sentiment,” says David Easthope, Senior Analyst for Coalition Greenwich Market Structure & Technology and author of Alt Data for Producers: More than Just the Data.

The Alt Data Edge
While, investors believe alt data on supply chains will give them an edge, employing alt data is no easy task. Alt data needs to be normalized, interpreted and incorporated into investment and portfolio construction processes. 

Until recently, many investors sourced their own alt data or purchased raw data from external providers. Increasingly, data vendors and aggregators are providing not only normalized data, but also tools, techniques and expertise to make the data more useful and powerful in investment models. This also includes technical support for data integration, and even access to data scientists who can help analyze the alt data. 

“Alt data is about more than just the data,” says David Easthope. “Vendors and aggregators must go beyond simply providing data and help remove obstacles and otherwise support investors in their use of alt data.”