This document discusses alternative data in capital markets. It provides an overview of alternative data sources like social media, satellite imagery, and location data. It also describes how firms are using alternative data to enhance traditional analysis and develop new investment strategies. The document notes that most alternative data users have seen returns from using this data. However, accessing and analyzing large alternative data sets remains a challenge. It promotes the use of data platforms and visual analytics to more effectively ingest, store, and operationalize alternative data.

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Alternative Data in Capital Markets

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Featured Speakers
Dr. Richard Harmon
Industry Lead, Financial Services
Cloudera
Kevin McPartland
Managing Director
Greenwich Associates
Paul Lashmet
Director Financial Services
Arcadia Data
Discuss recent buy side market trends in
alternative data based on latest research findings.
Describe the alternative data ecosystem and how
to ingest, store, and operationalize machine
learning and advanced analytics to complement
and extend traditional BI.
Demonstrate how alternative data can be applied
to enhance traditional analysis using native visual
analytics and location intelligence.

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Alternative Data Market Trends

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Polling Questions
1. What is your experience with alternative data?
a. We are new to the whole concept;
b. We use it and want to expand further;
c. We use it heavily but want to increase ROI.

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What comes first, the data or the strategy?
● 55% of asset managers seek out data to
support a strategy while two-thirds of
hedge funds utilize alternative data to
unearth new investment ideas
● Two-thirds of buy-side firms using alternative
data--which includes nearly 80% of hedge
funds--take a team-based approach using
data visualization as their primary tool.

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Examples of Alternative Data Sources
Location/Foot Traffic Data – Companies
that use different means to understand
where consumers are going by
measuring foot traffic via check-ins,
video analysis, etc.
Local Prices – These companies can see
what’s happening to prices and inflation by
aggregating data from ground-level
sources.
Satellite Data - These are companies that
utilize image data from orbiting satellites
to do things like measure the number of
cars in Walmart parking lots or farm health
based on the color of crops.
Alternative Credit - Companies developing
new credit models that utilize sources of
alternative data (like mobile usage).
Web/App/Social Media Data – These are
companies which mine social media or use
data firehoses from the web/mobile to
understand what’s happening in the world or
how people are interacting with their devices.
Credit Card Transactions – These are
companies that use anonymous
aggregate transaction data to
understand trends in consumer
purchasing habits.
Weather Data – These are companies which are
developing weather models and utilizing more
sensors to get better localized data or improve
weather forecasting.
Alternative Data Monetizers/Aggregators
– These are companies who pay for access
to individual data streams which become
more valuable in a bundle, and then sell
those packages to investors.

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Social media is now, IoT is tomorrow
● Over 60% of asset managers and nearly 75%
of hedge funds are currently using social
media and social-driven news feeds as part of
their investment process
● The Internet of Things (IoT) and satellite
imagery are the biggest items on their wishlist

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Polling Questions
2. When I think of alternative data, the first thing I think of is:
a. Social media and news feeds
b. Logistics data
c. Satellite Imagery
d. Business performance information about private companies
e. IoT captured data
f. Data generated by machine learning/artificial intelligence
g. Geolocation data
h. Business performance information about public companies not included
in public filings
i. Other - Proprietary Alpha Capture

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Alternative Data Proving its Worth
Return on Investment
● 90% of alternative data users have seen
the return they hoped for, with hedge
funds slightly more positive than asset
managers.
● 95% of respondents say that alternative
data helps to explain strategy to their
clients, ultimately increasing the total
assets they manage as well.

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Barriers to Alternative Data
Proving the return on investment isn’t easy, but is
necessary to convince management the up front
investment in the data and integration will yield
the needed return.
With management buy-in and the necessary
internal resources in place, utilizing alternative
data still comes with two major challenges:
● Finding and gaining access to the data needed
(or don’t yet know is needed).
● Securing the tools to analyze these huge data
sets and taking action on those findings.

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The Alternative Data Ecosystem
Beneficiaries
Subject Matter
Experts
Data Originators
Providers of
Modern Big Data
Platforms
1) The Beneficiaries of Alternative Data Strategies 2) Those that originate and prepare the data sources.
3) Providers of modern big data platforms that ingest,
store, and process the data.
4) Subject matter experts that turn an inkling of an idea
into an actionable strategy.

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Alternative Data Ecosystem – Where are the People?
• Strategy drives the acquisition of data
• Firms find the data on their own
• Firms go to the data
• Different types of alternative data are used in conjunction with other types.
• ….and the data is sourced from multiple providers (to create more volume of data).
• Firms demonstrate strategy and alternative data helps explain that strategy
• It is collaborative
• Self serve (“another team does it for me” is dead last. Excel and visualization are
self driving tools
• People are not the obstacles. Expense, compatibility, and figuring out how to work
with it are.
Self service, Collaborative, InteractiveSME Driven
Data Sources
Data Storage &
Processing
Reporting, Analytics &
Auditing
Data Ingest

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Cloudera Enterprise Data Hub with Arcadia Data Visual Analytics
Data Streams
Deployment Flexibility
Combine Data from Different Sources
Data Mgmt. Hub
Batch or Real- time
Data Streams
Data Sources
Data Sources
Data Storage &
Processing
Reporting, Analytics &
Auditing
Data Ingest
Other
Data Governance (Data Lineage, Data Protection)
“Native Visual Analytics”

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Open data science in the enterprise
IT
drive adoption while maintaining compliance
Data Scientist
explore, experiment, iterate

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Our goal: An open platform for data science at scale
Help more data scientists
use the power of Hadoop
Use a powerful, familiar
environment with direct access
to Hadoop data and compute
Data Scientist
Data Engineer
Make it easy and secure to
add new users, use cases
Offer secure self-service
analytics and a faster path to
production on common,
affordable infrastructure
Enterprise Architect
Hadoop Admin

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Introducing Cloudera Data Science Workbench
Self-service data science for the enterprise
Accelerates data science from development to
production with:
• Secure self-service environments for data
scientists to work against Cloudera clusters
• Support for Python, R, and Scala, plus
project dependency isolation for multiple
library versions
• Workflow automation, version control,
collaboration and sharing

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Cloudera Enterprise Data Hub with Arcadia Data Visual Analytics
Data Streams
Deployment Flexibility
Combine Data from Different Sources
Data Mgmt. Hub
Batch or Real- time
Data Streams
Data Sources
Data Sources
Data Storage &
Processing
Reporting, Analytics &
Auditing
Data Ingest
Other
Data Governance (Data Lineage, Data Protection)
“Native Visual Analytics”

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Alternative Data Ecosystem – Where are the People?
• Strategy drives the acquisition of data
• Firms find the data on their own
• Firms go to the data
• Different types of alternative data are used in conjunction with other types.
• ….and the data is sourced from multiple providers (to create more volume of data).
• Firms demonstrate strategy and alternative data helps explain that strategy
• It is collaborative
• Self serve (“another team does it for me” is dead last. Excel and visualization are
self driving tools
• People are not the obstacles. Expense, compatibility, and figuring out how to work
with it are.
Self service, Collaborative, InteractiveSME Driven
Data Sources
Data Storage &
Processing
Reporting, Analytics &
Auditing
Data Ingest
Direct connection to
sources.
Join as needed
Direct connection to
sources.
Join as needed
Intuitive and web based
user interface.

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The First Native Visual Analytics Platform for Big Data

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Arcadia Data Native Visual Analytics
Go from
layered architecture…
… to directly where the data resides.

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Enrich Traditional with Alternative Data
Sentiment Analysis Emotional Analysis
Evaluate Holdings with Alternative Data
• Location intelligence & geoenrichment
• Satellite imagery
• Demographics – population growth,consumer vitality, retail sales potential
• Consumer segmentation
• Sentiment analysis on brand
Traditional Portfolio Visualization
• Standard performance chart
• Performance heat map
• Transaction Volumes
Links
to…

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Ending Thoughts
Alternative data is any type of data, depending on the point of view
The subject matter experts must have the ability to explore and evaluate any type of data.
Creativity is key to spotting and executing new opportunities.
It is unprecedented so there may not be a template to work from
If the data sets have a precedent then it’s not alternative.
Time is precious (alpha decay)
Competitive advantage diminishes when the competition adopts a novel method.
The technology base is key to keeping ahead of the curve.
Understand the alternative data ecosystem and technology framework
So that you can evolve an inkling into real value while the window of opportunity is still open.

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Resources and Programming Note
rharmon@cloudera.com
paul.lashmet@arcadiadata.com
kevin.mcpartland@greenwich.com
tim.mckenzie@pb.com
SEPT 26–28, 2017
Strata Data NYC Conference
@ Javits Center in New York City
Cloudera, Arcadia Data, Pitney Bowes will all be there.
OCT 11, 2017
Greenwich Associates/Arcadia Data Webinar
How the buy side finds, uses and benefits from alternative data
ONLINE: Alternative Data in Financial Services Resource Page
Insights gained from partners across the alternative data ecosystem.
https://www.arcadiadata.com/alternative-data

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Thank you