Asset managers double spending on new data in hunt for edge

Gareth Jones

May 10, 2018

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Gareth Jones

Active investment managers have more than doubled their spending on new digital information sets and data scientists in the past two years, as they try to reinvigorate their trading fortunes and fight off the passive ETF.

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Asset managers last year spent a total of $373m on data sets and hiring new employees to parse them, up 60 per cent on 2016, and will probably spend a total of $616m this year, according to a survey of investors by AlternativeData.org, a trade body for the industry. It forecasts that overall expenditures will climb to over $1bn by 2020. With its fees under pressure from passive, cheap index-tracking funds, the money management industry is exploring various ways to deploy technology and data to cut costs and improve the efficiency of both back-office functions like fund distribution and compliance as well as on the investment side.

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