Commentary & Insights

CFM launches alternative data initiative with Columbia University’s Program for Economic Research

Capital Fund Management (“CFM”), the quantitative asset management firm, is pleased to announce a new initiative with Columbia University’s Program for Economic Research (“PER”), one of the world’s leading economics research programs. The initiative will explore and analyse how alternative data can be used to further the understanding of financial markets, to improve economic forecasting and to help uncover new sources of alpha. Significant advances in computing and analytical techniques have led to an explosion in the amount of data on a wide range of human activities beyond the realms of financial markets, but this alternative data is poorly understood.

CFM has been applying a quantitative approach to asset management for nearly 30 years. In this initiative, CFM’s long-standing expertise in data analysis will be combined with deep knowledge provided by top faculty and students in the university’s globally renowned economics department. CFM has extensive academic links and heritage, including formal associations with Imperial College London, The École Normale Supérieure and École Polytechnique. The firm also takes an active role in contributing to the public debate around financial markets and economics and in providing financial assistance and support to Ph.D. students. The initiative with Columbia’s PER furthers this agenda as it will launch a series of seminars and workshops that are focused on understanding how alternative data can be used to better understand price formation and economies. And it will give select Ph.D. students an opportunity to work on a specific research project at CFM.

The analysis of alternative data is an exciting opportunity to better understand human behaviour in a way that helps asset managers, other market participants and policymakers. The initiative will be looking at a range of non-traditional datasets that have yet to be fully understood in terms of their impact on economies and market pricing, including datasets such as satellite imagery on shipping, meteorological data and patent filings.

Columbia University’s Program for Economic Research alternative data initiative

Jean-Philippe Bouchaud, Chairman of CFM said: “We are delighted to be partnering with Columbia’s PER. Data is now available on a wide range of activities, but not yet routinely used to inform market practitioners and policymakers. This presents us with a huge opportunity, and we believe the combination of CFM’s quantitative capabilities in math and physics, and leading economists at Columbia University’s PER will enable further understanding in this exciting area”.

“Alternative data is becoming more important in economics because of the inherent limitations of traditional financial and economic data. Economics today is increasingly an empirical science and advancements will be made by those willing to combine complimentary skill sets,” said José Scheinkman, the Charles and Lynn Zhang Professor of Economics at Columbia University. “CFM and Columbia’s PER is a good match and this initiative will give the faculty and wider business school access to datasets and expertise once unavailable to previous generations, presenting us with a fantastic new opportunity to do high level original research.”

About Capital Fund Management (CFM)
Founded in 1991, Capital Fund Management (CFM) is a global investment manager, with over USD$10bn under management. It bases its investment decisions on a global and quantitative approach to financial markets, supported by state of the art IT infrastructure and experienced risk management. CFM’s methodology applies academic principles to finance and relies on the in-depth statistical analysis of financial data for asset allocation and trading decisions, which are executed in a highly systematic and disciplined way. In addition to carrying out research on new strategies, CFM researchers contribute to the advancement of knowledge in finance and economics through initiatives like the CFM-Imperial Institute of Quantitative Finance and by publishing academic articles. CFM’s global investors include Pension Funds, Endowments, Fund of Funds, Private Banks, Insurance Companies and Family Offices. It employs approximately 280 people in offices in Paris, New York, Tokyo, London and Sydney.
Program for Economic Research (PER)
Founded in 2003, the Program for Economic Research (PER) Columbia University funds research to address the economic challenges, trends, and policies affecting people around the world. PER’s mission is to ensure that Economics faculty and students have access to the resources necessary to support research activities at the highest possible level and to help disseminate the resulting achievements. PER supports outreach activities to inform the understanding of economic issues.