Acadian partners with Microsoft on data for economic forecasting

The investment industry’s excitement about the swelling world of Big Data is palpable at the moment.

A quantitative fund manager has entered into a partnership with Microsoft to use the tech giant’s “Bing Predicts” data engine to improve its economic forecasting, another indication of how the investment industry is piling into the world of Big Data.

Boston-based Acadian Asset Management – which manages about $80bn – hopes that adding Microsoft’s prediction tool will offer a real-time gauge of economic activity and help improve returns .

Bing Predicts uses a field of artificial intelligence called “machine learning” to scrape data from social media and Microsoft’s Bing search engine, a distant rival to Google, to produce potentially predictive signals of consumer sentiment and economic growth.

The investment industry is scouring the world for new alternative datasets that they can use to augment traditional information sources to navigate markets, which has proven increasingly difficult in recent years. Hopes are high that the massive datasets now produced in real-time by consumers, companies and even governments will eventually become a vital source of market-beating “alpha”.

John Chisholm, chief investment officer of Acadian, said in the statement:

“For the last thirty years we have used data to make objective investment decisions. Throughout our history we have been early adopters of new and novel sources of data to help us make better decisions and we are excited about the ways that new technology can help draw insight from large information sets. Microsoft is an ideal partner in this project, given its internet expertise and prediction capabilities.”