Hedge fund giant Two Sigma has announced plans to integrate data from eVestment, an institutional investment data provider, into Venn, its portfolio analytics platform. Two Sigma has a reputation for expertise in data science and technology trends, a market position it hopes to strengthen through the strategic alliance.
“We built Venn with a world-class set of analytics that sit on top of data. We license some data ourselves and we allow clients to upload data, but we’re trying to make it so you can log into one place and have the data to analyze,” Carter Lyons, Two Sigma's chief business officer, told Institutional Investor.
According to a statement from the company, the integration will “significantly enhance” the breadth of data available through Venn. The goal is to provide more robust and complete data and analytics for institutional investor clients and to better inform clients of portfolio risks across asset classes. In short, clients will no longer have to go to eVestment, download return data, and then upload it to Venn for analysis. With the new integration initiative, all of the data and analytics will occupy the same platform.
According to Lyons, the integration will “seamlessly” pair Venn’s analytics with eVestment’s data, allowing users to access both tools in one place. “By providing [eVestment's] data set seamlessly in Venn, it’s skipping a step,” he said. “Our Venn clients can now quickly analyze their existing portfolio, prospective managers, how those portfolios would fit into their overall portfolio, and [how they] can make better decisions using data.”
Lisa Terwilliger, head of strategic partnerships at eVestment, agreed. “By integrating eVestment data into Venn, we can more effectively help our joint clients make data-driven decisions, deploy resources more productively, and ultimately realize better outcomes,” she said in a statement.
Lyons said that platforms like Venn, which pair data and analytics, are the future of institutional investing. In the near future, he explained, data and analytics will go hand-in-hand as investors look “through returns” for more detailed and specific information. “[The world] will continue to be driven by data science,” he said. “Today, people want to know what they’re actually exposed to, [in a way that goes] deeper than the asset-class level.”
The alliance comes at a time when demand for data and transparency is skyrocketing across financial services, particularly in the private markets. In private equity, researchers have called for firms to share more robust data about their portfolio companies, a move that would provide investors with a clearer idea of risks, fees, and performance, as II previously reported.
In an October speech, Securities and Exchange Commissioner Allison Lee said that the increasing amount of capital flowing into the private markets from large institutional investors such as pension funds and mutual funds could pose challenges for asset owners and beneficiaries. The lack of transparency in the private markets, she said, exposes institutional portfolios to increased risk, a situation that may require the SEC to reassess the balance between public and private markets and perhaps ultimately require private market participants to disclose more data to investors.
“We are fully supportive of the push across the industry to be more transparent and to provide more data,” Lyons said. “But at the same time, we're trying to build analytics that allow us to look through the data that's already being provided, to provide a more granular level of information.”