Using "Alternative" Data in your search

by an member from University of California, Berkeley - Haas School of Business

1 year ago

Hi everyone,

I'm a third year at UC Berkeley and am currently researching the use of alternative data in private equity. I'm curious to know if you have ever used an "alternative" data source in your search to evaluate potential risks and opportunities of a company. This can be any non-traditional information about a company, industry, or the economy as a whole.

I'd be happy to hear any insight you have.

1 like
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2 comments

searcher from Northwestern University - Kellogg School of Management

Hi Kevin - I'm overweighting the importance of how long a business has been around - leaning into the Lindy effect: https://en.wikipedia.org/wiki/Lindy_effect

Searchers often talk about the fact that a business has been around for a long time makes it less risky, but I'd go even further in saying that it makes it not only less risky, but more valuable. And I believe the market is missing this.

1 year ago | like reply | 0 likes

searcher from Texas Tech University

Hi Kevin, I generally look at 3 pillars to evaluate a business. Competitive advantage, management, and valuation. Within those pillars there are large numbers of standard and alternative/non traditional data that can be used. With the explosion of data enabled by current technologies, I believe that there will be more non-traditional sources that will become more common.

What traditional metrics do you use?
What non traditional data are you evaluating?

1 year ago | like reply | 0 likes

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