Spy -satellites and phone detectors. How new data firms change investment.

Copyright © HT Digital Streams Limit all rights reserved. Spy satellites, road cameras, phone tracking. How Alternate Data Cyrates Change Investments. David Wignall, Barrons 8 min read 27 Aug 2025, 12:36 AM IST From left, technicians install cameras for Genlogs. A worker during the manufacturing process for an albed space that is very-earth-winning satellite. In summary new businesses collect any form of business and consumer economic activities on which they can get their hands and sell it to investors. If you have made a trip over the past year, chances are you have driven through one of Ryan Joyce’s cameras. They are everywhere: hang on street lights in the highway, stick out the walls of warehouses and sit on the roofs of car dealers. Joyce is the CEO of Genlogs, a commencement that collects data on the movements of America’s semi-trailer trucks. The company operates nearly a thousand cameras that monitor the roads of the country and cut photos of 18-wheelers as they drive past. Joyce says Genlogs can tell his customers where every delivery truck in the country is located on a given day. Most of Genlogs’ customers are logistics and cargo brokerage businesses, which use the initial data to reduce theft and optimize delivery routes. But recently, Joyce says he receives a lot of interest from a new set of potential customers: investors. Hedge funds want Genlogs data because it can tell the amount of truck traffic in the US, a useful clue to the health of the US economy. Genlog cameras can even help investors to bet on specific shares trading in public, such as Walmart or a truck giant JB Hunt Transport Services, says Joyce. Welcome to the world of “alternative data.” It is a fast -growing market where businesses collect information about everything, from credit card transactions to the number of travelers passing through security airports. Investors then buy the data in the hope of gaining insights over those provided by traditional businesses and government reports. The use of alternative data by investors is nothing new. In their research processes, different funds have been included for decades – including measures of electricity consumption and scores of the number of cars parked outside retail stores. What has changed since the pandemic, says insiders, is the volume, sophistication and variety of data collected and used. Thanks to recent advances in computer vision technology, language processing models and web crap instruments, even small businesses such as genlogs can harvest far larger and more complicated data sets than ever before. It’s not just trucks. Data vendors now tell investors how many customers click on a specific product on an e-commerce website. They follow how many pedestrians enter a specific bricks and mortar store. They monitor blockchain activity, reddit and X -Feeds and satellite imagery. This is not surprising, as the quality of alternative data has improved, a rapidly growing part of the investment community has seized it. “The hedge fund part of our business grows 100% annually,” says Craig Fuller, CEO of Freightwaves, a company that follows 85% of the global cargo volume as it moves worldwide. Investment companies will spend at least $ 3.3 billion in alternative data sets in 2025, according to NeudData, a consultation. Spending has grown by 21% a year since 2020 and could rise to more than $ 8.6 billion by 2030 (estimates are as high as $ 39.9 billion). In a poll released by the Law Firm in February Lowenstein Sandler found that two-thirds of the institutional investors now use Alt data, double the share compared to just two years ago. Richard Lai, Bloomberg’s global head of Alt data, says investors’ appetite for data has dramatically exceeded expectations: The number of firms using Bloomberg’s Alt Data Analytics platform is more than four times the company’s market size in 2023, he says. Prices for Alt -data vary greatly. More than a quarter of the datasets detected by NEUDDA have a sticker price of $ 25,000 or less, while only 3% of the data sets sell for $ 500,000 or more. But to be at the top end pays large dividends. According to Neud data, the largest industry players in dozens of millions of dollars can rake in a single data set in a single data set. Share market investors are not the only ones to tighten data: private equity firms use alt-data to assess potential acquisitions; Insurance companies use it to introduce premiums; Retailers with large box use it to choose new shopping venues. But sales to investors are a growing part of the pie, according to Daryl Smith, Neudata’s head of research. A weapons of arms racing funds are now being struck when discussing how Alt data informs their investment strategies. But one thing is not a secret: Data sources that were once considered unconventional are now part of the daily investment process with most major asset managers. And the security of new data sets, sometimes at significant costs, is one of the most important ways in which elite funds remain before the pack. “There was a technological arms race in the Quant world to find and do data,” says David Easthope, a senior analyst at Crisil, a research firm focusing on the financial industry. “Investors looking for excellent returns are always looking for an edge.” To do their trades, quantity models of hedge funds rely on clean, high-frequency data sets that go back for years or even decades. Until recently, the number of data sets that meet the strict criteria of Quant Funds were relatively limited. But as data sets mature, quantity investors say that the number of data sets that are digestible by their models grow. Artificial intelligence also opens new boundaries. This enables companies to analyze new types of data, such as Genogs’ camera footage or PDF files of government documents. It also helps to help sellers improve the quality of their existing databases. “The growth opportunity is not just in the data itself,” says Carolyn James, director of strategic sales at Imortgenius. “This is the ability, with AI models that really learn deeply, to link data to other sources.” Thanks to AI, Importgenius says that it can provide its customers with a specificity at the container level of every product entering and leaving the US by boat. “Ai is definitely a back wind,” said Tophdad, CEO of the starting salted space. Albedo plans to launch satellites in a very low earth winning lane, where they will capture images of the Earth’s surface on a resolution previously reserved for military spying satellites and drones. As computer vision improves, he says: “You can actually pull out more intelligence and withdraw in an accurate way from any given image solution.” An employee at Albedo Space, whose satellites with a low earth-orbit will take a high resolution of the earth’s surface. AI also makes it easier for non-quantitative investors to use alternative data sources. Analysts can use AI models to analyze the text of social media posts or the sound of investor calls, without spending millions to develop internal models. They can also buy data directly from a growing number of AI-powered data providers, or use information published on Bloomberg’s Alt Data Analytics platform. Thanks to improved accessibility, many data companies say they now see a strong interest of the ‘long tail’ of investors: the small hedge funds, family offices, wealth advisors and retailers who previously did not have the resources to use large amounts of alternative data. Jay Hatfield, who runs the investment firm infrastructure Capital Management, says the submission of the company and economic reports of the government. For one, they are too slow: Earnings and government statistics are only published quarterly, while Alt data can provide insights in real time. For another, public data is often unreliable: reports published by the US Bureau of Labor Statistics have been becoming less accurate for years, even before President Donald Trump fired the Bureau’s head after a particularly poor Jobs report. To supplement traditional sources of information, Hatfield’s firm turned to Alt data. Analysts use information from Placer.AI, a start that harvests anonymous geolocation data of ten millions of mobile apps to see how many customers enter stores. They also use data from Solimenweb, a company that detects how many user programs download and visit specific web pages. At Bloomberg, part of Richard Lai’s role is to identify and add new data sets at Bloomberg’s Alt data platform. The task is “never -ending,” Lai says. As information is widely adopted by investors, the ability to deliver returns on the market can spread, causing hedging funds to seek even better information. “It’s something that will never stop,” he says. “Data is going to get better, it will get faster, it will become more accurate.” A better world? Cesar Orosco, head of Alpha Equity Investments in Vanguard’s quantitative stock group, says the incidence of Alt data changes the art of investment. Decades ago, information was scarce, and researchers spent much of their time finding reliable data. Now information is plentiful – and the right lead comes from the interpretation, rather than obtaining data. Many data providers and investment staff argue that Alt data makes financial markets more efficient. Orosco is not so sure. While investors are blowing through the oceans of data, many of which send noisy or conflicting signals, they can easily mislead interpretations. Speculative bubbles and meme shares endure, he notes. ‘Are the markets more or less efficient? I think the jury is still out, ‘he says. Privacy remains a major concern. Each data provider conducted by Barron emphasized that the data they analyzed and sold at each stage were anonymous, and could not be used to identify individuals. Data -platforms such as similar web and placer.AI says the information they collect from partners is already anonymous when they receive it. To protect privacy, Genlogs say his cameras immediately delete images from private vehicles. “Balancing the benefits of privacy with the benefits is going to be a big question over the next five years as AI capabilities become more robust,” said Patrick Schmid, chief insurance officer of the Insurance Institute, a research group for insurers. “Softing personally identifiable information associated with the pieces will be critical.” Easthhope says the biggest privacy issue comes from investors who collect information about managers and employees. Data on where CEOs travel – for example, by tracking their private jets – can provide useful investment information while pose a risk of privacy and safety. “There is an avid appetite for this data,” says Easthop. “And where the line is, I honestly don’t know. I think the line will be printed. ‘ Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. 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