Nasdaq is buying a company that offers hedge funds obscure data to give them a trading edge
- A little over a year after buying data provider eVestment for more than $700 million, Nasdaq announced the acquisition of alternative data company Quandl on Tuesday for an undisclosed sum.
- Quandl collects data through non-traditional methods, like tracking corporate aircraft leases to predict M&A deals.
- Quandl data is used by eight of the top 10 hedge funds, according to the company, as well as 14 of the 15 largest banks.
Nasdaq has continued its dive into the data provider realm with the acquisition of alternative data provider Quandl, highlighting growing interest from hedge funds for obscure data that can give them an investing edge.
The exchange said on Tuesday it had acquired Toronto-based Quandl for an undisclosed sum and will merge with it with its own alternative and financial data platform, though Quandl brand will remain.
The move comes as Nasdaq and other big exchanges are bulking up in areas like data and analytics and moving away from its bread-and-butter listings and trading business which are lower margin.
In 2017, Nasdaq spent around $700 million to buy traditional data provider eVestment.
Read more: Nasdaq is shaking up one of its legacy units
Quandl, which pulls datasets from non-traditional sources like corporate aircraft lease to predict M&A deals, says it's used by eight of the 10 largest hedge funds and 14 of the 15 largest banks.
"We kept hearing one name when we were looking at alternative data providers from the industry, and that was Quandl," said Bjorn Sibbon, Nasdaq's head of global information services, in an interview with Business Insider.
Quandl will keep its brand as part of the deal and Quandl CEO Tammer Kama will continue to lead the team. Nasdaq, Kamal says, gives his young company a "bedrock" to work off of.
"We go out into the wilderness and knock on doors looking for data that Wall Street would have never seen," Kamal said.
Spending on alternative data is expected to surpass $7 billion by 2020, according to Deloitte. There are roughly 375 alternative data providers in the industry, according to AlternativeData.org.
Other alternative data providers offer satellite imagery of shopping mall parking lots, credit card transactions or location-based mobile tracking. Hedge funds and asset managers use the data to make smarter investing decisions.