M Science’s bounceback: The CEO details how the alt-data pioneer has nearly doubled its staff and is courting large, corporate clients after a difficult 2019

Mike Marrale MScience

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Mike Marrale is not shy about admitting he was unhappy about where his company was a year and a half ago.

The CEO of alternative-data pioneer M Science, which was founded as Majestic Research before changing its name when Jefferies brought it into the fold in 2016, told Insider that the “crowded and overpopulated” space contributed to a poor stretch of years leading the firm to lose executives and cut data scientists, as Insider reported in late 2019. 

But the past year and a half, Marrale said, has been the “seminal moment we’ve been waiting for.” The pandemic forced companies to turn to data to determine how they were going to survive in the new reality. Long-time hold-outs at many asset managers and large corporations no longer could ignore the massive alternative-data space.

“The past year has pulled forward a lot of demand that would have come the next three to five years,” he said.

All eyes on alt data

The booming interest in the space has caused large institutions to become even more interested in the alt-data world. Insider reported data giant Bloomberg paid more than $100 million for Second Measure at the end of 2020, for example. 

The result for M Science has been extremely positive: The largest expansion in its 19-year history, going from 80 people at the start of 2020 to more than 150 now, with plans to hire 25 more before the end of the year.

The hires have been focused in a couple of areas such as technology, where Ben Tallman, the firm’s chief technology officer, runs a team of nearly 40 engineers, developers, and more. There’s also been hiring in the corporate-facing channel, which has come into its own over the last year.

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Corporates have been the white whale for many alternative-data vendors looking to expand their business beyond the hedge funds that were their original customers. The reality though is while funds like Point72, Citadel, and Two Sigma invest heavily in data-science talent and infrastructure to put M Science’s offerings to work, corporations have not yet spent the same resources.

M Science is one of the few alternative-data players that might be able to bridge the gap, though. The firm partners with 65 data vendors and produces reports on insights from the data their analysts find, along with constantly updating data systems where more sophisticated clients can do their own analysis.

Marrale said a critical part of the business is that once clients adopt alternative data, “they don’t really go back.” In the corporation sphere, M Science has signed on several as paying clients, but also partnered with some to clean and sell their internal data.

“We’ve been very creative in making these partnerships happen,” he said.

M Science has their employees work from inside the corporation they partner with, and generate their reports based off the company data there, so the data never leaves the original company. The alt data company has  proprietary software that removes personal identifying info from the corporation’s data before its analysts get …read more

Source:: Businessinsider – Finance


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