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CEO CHAT: Thasos’ Skibiski Talks Alt Data, Tech and Regulation
Traders Magazine Online News, November 13, 2017
Today’s traders are bombarded with new technology, designed to help process new forms of data and help fulfil the ever-increasing mandate of new regulations. Greg Skibiski, Chief Executive Officer at Thasos, spoke to Traders Magazine about how his firm looks to help traders make sense of new data forms and create new alpha-bearing trading strategies amid heightened regulator scrutiny.
Traders Magazine: How does the buy side currently view alternative data? You’ve focused your business on hedge funds. Is there a difference between how hedge funds and institutional investors use alt data to inform investment decisions?
Greg Skibiski: Most alternative data products in the market today are designed for equity long-short fundamental managers, which slows adoption rates by institutional investors. Generally, larger organizations with longer investment horizons and less portfolio turnover adopt new technologies/data at significantly slower rates than their smaller and nimbler counterparts.
That said, in 2017 we have seen increasing interest from institutional investors and those with longer holding periods. Unlike the typical equity long-short manager who consumes relatively high-level data to trade marginal information advantages on as many names as possible each quarter, some managers with a longer holding period are using significantly more granular data to build deep fundamental models from the ground up. Others are using the same data as the equity long-short managers, but with a focus on risk management and position-sizing rather than short-term alpha generation.
TM: How do you collect data and how do you analyze it for clients? What about privacy concerns?
Skibiski: We only work with geolocation data from mobile phones, that’s it. Our data is collected from apps on mobile devices, based on first-party relationships with the app publishers. It has taken us six years to identify the highest-quality sources, build those relationships, and execute long-term license contracts.
In those six years, we evaluated probably a thousand datasets during the process. Most datasets sound great when discussed at the initial meeting; you don’t find out until the very end if they’re any good. The problem is, these companies just don’t have the tools or experience to be able to properly describe their own data.
We don’t receive any Personably Identifiable Information (PII) from our sources, and the data is only collected after users opt in. We also only deliver aggregate, anonymized data feeds and contractual limitations prohibit attempts to de-anonymize the data. All of this is essential to pass the compliance processes of the funds we work with.
TM: What are the most significant limits of the technology at this point?
Skibiski: For now, the data collection methods our platform uses do not have the same indoor accuracy as a Bluetooth beacon, for example, but we can measure foot traffic at thousands of previously unmonitored properties as quickly as tomorrow, and we immediately benefit from over two years of historical data to find statistically significant patterns and generate the actionable information.
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