Crux + FISD Forum Highlights Shift to Quantamental Investing

 

On October 4, Crux and FISD held an Alternative Data Forum to discuss new data opportunities for financial firms. Leading institutional investors joined the industry’s top providers of data and data analytics at the Amazon Web Services Loft in New York City to discuss the benefits and challenges of incorporating data into investment strategies.

A presentation by Dan Furstenberg, Global Head of Hedge Fund Distribution and Head of Data Strategy at Jefferies, highlighted quantamental investing as the industry’s major growth area. As funds cultivate sustainable processes to find and use data, investors will increasingly see the benefits of both man and machine. The quantamental approach, which leverages algorithms to improve human predictions, is already helping many firms enhance forecasting while reducing bias and random noise in decision making.

While today, the investment landscape is about 60% discretionary, 25% quantamental, and 15% systematic, this landscape is changing rapidly as new data sources and technologies emerge to inform investment strategies. Based on current trends, Furstenberg anticipates that quantamental will become the industry’s dominant strategy, with discretionary and systematic approaches occupying smaller pieces of the investment landscape in the coming years.

A presentation on alternative data by Jon Neitzell, Chief Data Officer for Goldman Sachs Fundamental Equities, supported the theory that quantamental investing is on the rise. Neitzell brought home the cause and effect of data decisions by sharing concrete examples of how data has informed trading decisions at Goldman Sachs.

Our Head of Go-to-Market, Elizabeth Pritchard, moderated a panel discussion on how the financial industry can overcome its main barriers to using data in decision making by onboarding relevant data in a sustainable and scalable manner. During the panel, senior leaders and data specialists from Two Sigma, UBS Asset Management, Schonfeld, and McKinsey shared the new skills and tactics funds will need to adopt in order to access data efficiently and embed it seamlessly within business processes.

Ultimately, the Crux + FISD Forum in New York City generated opportunities for industry leaders to continue their evolution by collaborating on best practices for sourcing, onboarding, and leveraging data efficiently. As quantamental strategies become essential across the industry, a collaborative approach to overcoming first mile challenges can help each firm devote its focus to the differentiating tasks of applying analytics and making stronger decisions.

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