Asset managers turn to alt data on supply chains

As supply chain disruptions cloud the economic outlook and affect a wide range of sectors, asset managers are increasingly seeking alternative sources of data on the state of supply chains, says Greenwich Associates in a new report.

According to the report, almost half (44%) of North American asset managers surveyed by the firm said they’re already using novel data sources to inform their investment decisions, and another 24% are planning to utilize “alt data” in the near future.

In particular, 48% said they’re seeking alt data on supply chains and 41% are looking for insight into logistics performance, it noted.

“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,” said David Easthope, senior analyst at Greenwich, in a release.

Alt data includes everything from scraped online information to satellite images of shipping ports, geolocation and mobility data.

While interest in alt data is increasing, Greenwich said that knowing how to use the information is also a growing challenge.

“Alt data needs to be normalized, interpreted and incorporated into investment and portfolio construction processes,” it noted.

As a result, rather than obtaining raw data directly, asset managers are increasingly seeking tools and analytics to help make sense of these data sources, the firm reported.

“Vendors and aggregators must go beyond simply providing data and help remove obstacles and otherwise support investors in their use of alt data,” Easthope said.

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