Insights

(Business Insider) Alternative Data Platform Adaptive Management Lays-Out the Industry’s Future

What’s next for alternative data? Can it be (or was it ever) a persistent source of alpha for active management? This short read from BI (paywall) provides a snapshot of the budding alt data industry as we head in 2020. Find our analysis, below.

From BI, the takeaways are 1) yes, alternative data has been a source of alpha to some but 2) that’s melting away, at least from the most commonly used sector data (consumer/retail, credit-card and payments data, etc.), 3) while trends fresh include investment in-house data teams from the industry’s more sophisticated players, broad-based interest in differentiated data-sets, and uptake from PE (and maybe Corporates, too).

Something to watch – watch trends in hiring for in-house alternative data teams, from specialists in data sourcing & strategy to data engineering and investment analysts with specialized training in the analysis of alt data-sets (often sector-based). Is the broader population of active managers investing capital in people and infrastructure? Are the more sophisticated early entrants continuing to hire, pausing, or shrinking their teams? What are there differences between discretionary and systematic managers?

At TLG, we recruit data professionals for active managers and we’ve learned a few important lessons. Active managers – even systematic managers who invest more in their tech stack – struggle with infrastructure, data quality, people, and cost. Absent relevant infrastructure, Quants with well-rounded tech skills are often left to do the heavy lifting involved in acquiring and cleaning alternative data – on top of their existing duties. “Get the quant to do it” is still a thing. Where talented data engineering and data science teams exist, many companies have struggled to integrate them with the business in a meaningful way, and are left fending off FAANGs and start-ups with compelling opportunities. A few serious efforts to train fundamental investment analysts in data science skills have ended with a thud. And all of the above costs a pretty penny.

Yet as struggles in active management continue, the industry must innovate. Look for continued investment in data architecture and growth in both vender-based solutions and in-house solutions which seek to provide insights to a broad-set investors.

Have a story to share or a relevant recruitment need? Reach out to Tom Hudson at tom@locke-group.com.

(FT) Juggling babies, parental leave and an investment record

[Excerpt] “…research by Morningstar this week showed there were more UK funds run by managers called David than by women.”

This article from FT explores the value of investment track-records, difficulties women face in building investment track-records, and the strategies various leaders and firms are taking to increase diversity in investment teams.

Breaks of any kind – including maternity leave – disrupt investment track-records. It can be difficult to bounce-back. But from our perspective, that difficulty only affects those who have already achieved rank to make investment decisions. Investment managers which seek to advance women in investment roles must address issues which funnel women away from the investment track AND make considerations which allow talented women investors to continue in their career while juggling multiple demands and taking needed breaks.

(Markets Insider) Low recession risk, faster growth, and unemployment at a 70-year low — here are Goldman Sachs’ predictions for the US economy in 2020

With many fearing a recession on the horizon, it is refreshing to hear that Goldman is optimistic about 2020. There are several factors noted in the article including consumer spending and the trade war eventually subsiding. The risk of a recession seems less likely in the near-term.

Click to read our 2020 Candidate Experience Manifesto (PDF).

83% of candidates will share a positive interview experience with their inner circle*, but 66% will also share a negative experience – a figure which is growing year-over-year. Either way, how you recruit impacts your brand – your reputation spreads among candidates and influences their decisions. What are hard-to-reach, passive candidates hearing about your company?

In our inaugural Candidate Experience Manifesto, TLG provides the 10 keys to an excellent candidate experience, complete with helpful tips which you can begin to implement today.

https://qz.com/1756001/plants-make-people-more-productive-because-of-biophilic-design/

This article from Quartz (QZ.com) explores the idea that biophilic design – design which mimics nature or exposes people to nature in a literal way – is good for companies and their employees. It is capable of improving focus, productivity, and otherwise helps to reduce mental fatigue and increase employee emotional satisfaction.

As per the article, Americans spend 93% percent of their time indoors (home, commuting, work, etc.) and one third of their time at work. Despite those figures, humans have biophilia, meaning we have an innate need for contact with nature – it’s essentially to our wellbeing. In short, we’re in conflict.

Feeling inspired? Keep it simple by adding greenery to your work-space – potted or hanging plants, even living walls or ceilings – or to increase natural lighting. Pushing past the basics, try hanging photos of natural settings or incorporating nature in your office space design – wood, stone, earth, and flowing water, etc. Circadian lighting or artificial lighting which mimics natural light should work, too.