NYAIR Episode 32 – How Alternative Data is Changing Discretionary Investment

Alternative data, or “big data,” refers to massive quantities of complex, and often obscure, information about individual companies or industries that is analyzed by computer programs. As the alternative investment community has begun to embrace alternative data as part of its investment approach, it is important to understand some of the ways this new type of data is influencing investing.

Matei Zatreanu, the founder of quantitative data analysis company System2, address some of the biggest issues and questions regarding big data, such as:

  • What alternative data means today.
  • What the process of implementing a big data framework is, and what types of challenges and pitfalls firms face.
  • The difference between analysts or portfolio managers starting with an investment thesis and then factoring in big data, versus starting out with a big data set before forming a thesis.
  • What the current regulatory environment for this type of information is and how firms are navigating privacy issues regarding collecting such data.
  • The ways that firms are trying to stay ahead of their competitors as the use of big data becomes commonplace among alternative investors.

Matei Zatreanu created System2 as a way of supplementing investment research with data and technology that is supported by a team of experts in data science, sourcing, engineering and artificial intelligence. He also hosts Augvest, a community of investors who meet regularly to discuss trends in data-driven investing. Prior to starting System2, he was at King Street Capital, where he launched the firm’s data science initiative. Zatreanu holds an MA in math from Columbia University and BAs in psychology, math, government and economics from Cornell University.