The rapid increase in hedge funds’ use of alternative datasets is expected to continue apace in 2025, with almost all buyers planning to maintain or increase their spend.
The mood among alternative data buyers and sellers is one of confidence, according to a new survey from Neudata, which connects the two.
The survey yielded insights into how hedge funds and other buyers use alternative data. On average, buyers subscribe to an average of 20 datasets annually, spending $1.6m.
But it is almost double that for the largest buyers, including top quant managers and multi-strategy platforms, which subscribe to an average of 43 datasets.
Data providers are now targeting the powerful multi-strategy segment of the hedge fund market, with two-thirds reporting that their data was suited to this buyer (compared to 26% for private equity).
Their budgets are big but not limitless. High prices were named as the top hurdle to adopting new data by almost two-thirds (62%). And less than a quarter (24%) of trials result in a subscription being purchased.
Buyers are sticky, however, with more than 90% retaining their subscriptions once they’re on board, a very strong overall retention rate.
Neudata says buyers are seeking out more B2B data, data from emerging markets, transactional data and under-the-radar datasets in 2025.