Best Practices for Using Alternative Data: Collection and Provider Management

In the continuing quest for alpha, asset managers are increasingly seeking nontraditional data sets to inform their investment decisions. This first article in our two-part series covers portions of a webinar presented by our sister publication, Hedge Fund Law Report, that explored risks and controls for data gathering, and managing third-party data providers, including due diligence, contract provisions and ongoing monitoring. The second article will detail issues relating to insider trading, regulatory risk, data privacy laws, cybersecurity protocol and web scraping. See our three-part series on a fund manager’s road map to big data: “Its Acquisition and Proper Use” (Aug. 8, 2018); “MNPI, Web Scraping and Data Quality” (Aug. 15, 2018); and “Privacy Concerns, Third Parties and Drones” (Aug. 22, 2018).

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