No part of the capital markets is seeing more investment and innovation that the analytics sector. Trading firms are always looking to find new information sources and artificial intelligence has helped to improve those efforts as they try to find alpha is a sea of words and data.
AlphaSense, winner of the best sell-side analytics product category, is lining itself up as “the Google for company research.” Its search engine is designed specifically to help analysts and fund managers drill into—and organize—the “daily firehose” of public company information.
The AlphaSense engine helps users to find bits of information in huge documents or speeches, track new statistics and data, organize it, and have access to it from wherever advisors are located. Its algorithms and libraries are geared toward financial services and understand specific themes relating to things like “revenue guidance,” “capex growth” or “improving margins,” while semantic indexing makes searching for information on the platform more efficient.
Fund manager Opal Advisors uses AlphaSense to find information buried in dense text documents, such as a Securities and Exchnage Commission (SEC) filing, broker research report, a piece of news, or a conference transcript, according to James Hua, Opal’s founder and portfolio manager. Hua says he also uses the platform to generate investment ideas. “If I search for a certain word and they have a lot of synonyms attached to it, it gets underlined; there’s a thesaurus database behind it,” Hua told Waters earlier this year. “So, if I search ‘revenue guidance,’ guidance is underlined and it takes everything similar to guidance, such as ‘given the range of’ or ‘projected.’ I don’t have to be super precise about the words that I’m searching for. Sometimes I might miss something. I might term it as ‘risk,’ but they term it as ‘uncertainties’ within the balance sheet. So they recommend terms that I otherwise might not have looked for.”
Hua estimates that the platform cuts his search times down on an individual company from four or five hours to 30 or 45 minutes.
A year ago the vendor received $33 million in funding to grow its search capabilities, as well as its staff. New investors include the likes of Tribeca Venture Partners, Triangle Peak Partners and Quantum Strategic Partners, while Tom Glocer, former Thomson Reuters CEO, is also an investor.
As alpha becomes increasingly hard to find, AlphaSense aims to become the go-to tool to help firms find gold nuggets in a river of information.
It’s a trio of problems: Mifid II’s data problem; blockchain projects stalled; and data quality issues for machine learning.Subscribe to Weekly Wrap emails