Alternative data is a lot of things: a rapidly growing industry; the lifeblood of hedge funds; table stakes for any serious investor.
It's also untapped in Europe, and the latest hire by Nasdaq's Quandl unit is hoping to source the continent's most valuable datasets for the firm's clients. Quandl, a data platform used by hedge funds and banks to find alternative datasets, was bought by Nasdaq in late 2018 for an undisclosed amount.
Hamza Khan is Quandl's first-ever head of European data, the firm said in a release, joining the firm after founding his own alt-data firm, Suburbia, which was backed by Dutch bank ING Group. Khan will be based in Amsterdam, but will be sourcing data from across the continent, he told Business Insider in an interview.
While the firm's investor clients are interested in data on the region's biggest economies — the United Kingdom, Germany, and France, mostly — "we see companies, fintechs, disruptors, unicorns across Europe," said Khan.
New datasets are being uncovered every day; an IBM study from 2016 found that 90% of data in circulation was created in the two years prior, and alternative data providers have exploded in the intervening years, with hundreds — mostly based in the US — active today.
Europe, despite its mature capital markets, has been "a challenge for us to get good information," says Bill Dague, Nasdaq's head of alternative data, in an interview. The "fragmented" nature of the continent — with different data privacy laws in different countries, has complicated data collection and cultivation.
"Investor demand for European alternative data has been rising, but supply has not kept pace," said Tammer Kamel, head of Nasdaq's Quandl, in a release.
"We need boots on the ground, someone who understands local markets," Dague said.
In steps Khan, who will work with young fintechs in Europe to help them create sellable data packages as well as seek out prepared data for investor clients.
"There's a whole lot of untapped potential in Europe because the barrier to entry is so high," Dague said. "The pockets of opportunity are very similar to what we saw in the US."
Specifically, Quandl is looking at transaction data. Credit-card data and email receipt data are some of the most widely used data in the US, with nearly every hedge fund trading equities purchasing this information.
Europe's payment fintechs, Khan says, provide a potential launch point for a similar strategy abroad.
While data can be trickier to find Europe, hedge funds naturally have not shied away from the continent. Khan said funds are investing in data resources abroad — proving the demand for European alternative data.
"It's no longer just portfolio managers that funds are sending to London, it's data scientists and data scouts," he said.
"We are seeing a more dedicated data presence in Europe."
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