RECAP: 2018 FOX Fall Enterprise Forum

Presenter: Hardeep Walia, CEO, Motif Investing Session Description:  Alternative data is no longer an alternative. The digitization of our world has created an unprecedented data revolution that creates alpha opportunities for family offices in otherwise efficient markets. This cutting-edge talk examined the latest in artificial intelligence (AI) and data science and showcased where the future of alpha might come from. The asset manager of the future will need to evolve tools, processes, and personnel to exploit this alternative data advantage. The session demonstrated how data-driven products get developed and implemented in a portfolio.

Key Takeaways: 

1. Data provides the ability for creative exploration; it makes investor expressions actionable. Right now, if you wanted to invest in “AI,” how would you do it? Thematic investments would take six months to build the old-fashioned way (fundamental research). Using this data approach, an investment idea can be designed within several hours. 
2. When looking at all data since the dawn of humanity, 90% was created in the last two years. Only 9% of data has been looked at by humans in any capacity. This highlights the importance of “web crawlers” that process data systematically. 
3. Using data to make decisions is not new. Wall Street has been doing this forever (using company financials, stock market signals, etc.) This “alternative data” is the different approach (mining CEO speeches, patent databases, conference agendas). 
4. Artificial intelligence has been around since the 1960s. Algorithms get smarter when we feed them more data. The rise in data volume over last few years is what is allowing us to better train the algorithms.
5. Three things will never go away: 
   • Human insight – Chief Investment Officers and Data Scientists will always come up with the investment ideas
   • Human relationships
   • Advice – must be tailored; can’t be automated
      

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