Tag Archives: Buy-Side Research outsourcing

Traditionally, buy-side research has drawn from corporate disclosures, analyst reports, financial statements, and earnings calls. These tools remain foundational, as they help assess revenue, costs, guidance, and management tone. But their latency and lack of granularity often limit their predictive power hurdling the fast-moving markets.

Alternative Data & Buy-Side Wallets: 2025 Snapshot

Alternative Data & Buy-Side Wallets: 2025 Snapshot

Noticing a paradigm shift, firms are increasingly incorporating alternative data into their buy-side research workflow. By enabling earlier detection of trends, uncovering hidden risks, and offering higher frequency signals, alternative data is becoming a key differentiator. Buy-side research is evolving, and alternative data is at the center of this transformation.

From Raw Signals to Strategic Intelligence: Redefining Data in Buy Side Research

The conversation around data in investment research has evolved—from acquiring more information to extracting strategic intelligence that directly impacts portfolio performance. For modern buy-side firms, alternative data represents this evolution: a transition from lagging, structured disclosures to real-time, high-velocity insights that illuminate what’s happening on the ground before it reaches financial statements.

In 2024, over 78% of institutional investors reported using alternative data in some capacity, according to an EY survey, while global spending on such datasets exceeded $11 billion, projected to surpass $135 billion by 2030. This rapid adoption is driven by one simple fact: speed and context now create more alpha than coverage and volume.

Alternative data spans a broad spectrum of sources, including:

Satellite and Geospatial Imagery

Satellite intelligence now enables investors to monitor over 10 million industrial and logistics sites globally. Firms analyze port congestion, oil storage volumes, and crop yields to anticipate macroeconomic shifts. For instance, hedge funds tracking satellite imagery of Chinese ports in early 2023 detected a 7% rise in cargo activity, weeks before official trade data confirmed economic acceleration. Similarly, energy-focused funds using satellite oil storage estimates have improved forecast accuracy by up to 20%, according to UBS Evidence Lab.

Consumer Transaction and Credit Card Data

Spending data from anonymized transactions—covering over $3 trillion in annual consumer flows globally—provides early visibility into corporate revenue trends. Hedge funds using transaction-based nowcasting models have consistently achieved 2–5% excess alpha, as reported by BattleFin and Neudata. During the 2022 holiday season, consumer card data signaled softening demand in U.S. retail. It was two weeks before corporate earnings downgrades, allowing managers to reposition portfolios early.

Mobility and Geolocation Intelligence

Mobility data derived from mobile devices and logistics sensors captures real-time patterns. It is usally in retail footfall, transportation flows, and infrastructure use. For example, during post-pandemic recovery, funds tracking geolocation data in Southeast Asia identified a 40% rebound in mall footfall months before macro indicators reflected consumer recovery. This early visibility has become particularly valuable for frontier and emerging markets where official statistics are sparse or delayed.

Digital and Social Sentiment Analytics

AI-driven sentiment models now process over 100 million social and news data points daily, converting digital chatter into quantitative market signals. A 2024 study by Refinitiv showed that sentiment-based trading strategies improved short-term return predictability by 18–25%, particularly around earnings announcements and regulatory events. For asset managers, this offers a real-time pulse of investor psychology and reputational risk.

ESG-Linked and Sustainability Data

ESG-focused datasets now extend beyond corporate disclosures, incorporating sensor-based emission tracking, NGO datasets, and supply chain audits. According to MSCI, over 65% of global institutional investors now use ESG alternative data to complement due diligence and risk scoring. Firms integrating satellite-based pollution data into ESG models have reduced “greenwashing exposure” by up to 30%, improving portfolio credibility and alignment with sustainable mandates.

But the real breakthrough is not just access—it’s integration. The leading buy-side firms are developing multi-source data architectures that blend fundamental analysis with real-time signals, feeding directly into predictive models and risk dashboards. This has shortened research cycles, improved portfolio rebalancing agility, and delivered tangible performance improvements.

For C-suite leaders, this shift marks a deeper strategic pivot: buy-side research is no longer about information accumulation, but about intelligence synthesis—where foresight, speed, and contextual precision define the competitive edge.

Operationalizing Alpha: How Leading Firms Translate Alternative Data into Performance

The true trust of alternative data for the buy-side lies not only in the access, but mainly in the execution part, for determining how effectively it can be integrated into portfolio construction, research, and risk oversight. The top performers in asset management have evolved beyond experimentation, embedding these signals into systematic workflows that directly influence alpha generation and capital allocation. Below highlights the breakdown of how top managers are transforming disparate datasets into structured intelligence and the measurable gains that follow:

Buy-Side Data Sourcing

Buy-Side Data Sourcing

Accelerating Insight Cycles Through Unified Data Pipelines

Leading buy-side firms are integrating satellite, transaction, ESG, and sentiment data into unified pipelines, reducing research latency by up to 35%. Goldman Sachs reported decreasing trade signal latency from 120 milliseconds to 14 milliseconds, enhancing responsiveness to market opportunities.

Embedding Predictive Models into the Investment Framework

Over 70% of advanced hedge funds apply machine learning to alternative datasets, improving forecast accuracy by 20–30%. A PwC report highlighted that hedge funds utilizing alternative data and AI achieved 20% higher alpha generation in 2024 compared to those that didn’t.

Governance, Transparency, and Data Integrity as Competitive Differentiators

With 58% of asset managers embedding compliance checkpoints into data ingestion workflows, firms are enhancing data quality and regulatory adherence. This institutionalization of data governance is crucial as regulators tighten oversight on data sourcing under evolving privacy and AI transparency laws.

Demonstrable Alpha from Integrated Signals

Funds combining mobility, transaction, and ESG data report basis-point gains across core books. For instance, a quant fund merged geolocation and transaction data in its consumer retail portfolio, generating 280 basis points of alpha when footfall dropped 6% year-on-year, validating the predictive power of integrated alternative data.

The evolution of buy-side research is no longer incremental. Alternative data has become a core driver of alpha, risk management, and portfolio foresight. Hedge funds using transaction-based nowcasting achieve 2–5% excess alpha, while satellite-driven commodity forecasts improve accuracy by 15–20% (UBS Evidence Lab). Leading firms integrate satellite imagery, geolocation intelligence, social sentiment, and ESG datasets into unified workflows. This approach compresses insight-to-action cycles and helps anticipate earnings surprises and ESG or macro risks before the broader market.

Over 58% of institutional investors now embed compliance checks into alternative data pipelines. For senior leaders, the message is clear: integrating alternative data into buy-side research is no longer optional. It is the strategic edge that drives portfolio performance, predictive accuracy, and competitive advantage in modern financial markets.

Magistral’s Services for Buy-side research

Magistral Consulting offers comprehensive buy-side research services designed for institutional investors, including private equity, hedge funds, and asset managers. Magistral’s expertise spans equity and sector research, financial modeling and valuation, deal sourcing, and due diligence, ensuring informed investment decisions. Here’s a clear, structured list of Magistral’s buy-side research services:

Equity and Sector Research

In-depth analysis of companies, industries, and market trends to support investment decisions.

Financial Modeling and Valuation

Building robust financial models, forecasts, and valuation frameworks to evaluate potential investments.

Deal Sourcing and Origination

Identifying and screening investment opportunities aligned with clients’ strategic objectives.

Due Diligence Support

Conducting detailed operational, financial, and market due diligence to mitigate investment risk.

Portfolio Management Assistance

Helping clients monitor, optimize, and rebalance portfolios for performance and risk management.

Investor Outreach and Reporting

Preparing reports, pitch materials, and presentations for stakeholders and potential co-investors.

ESG and Risk Analytics

Integrating environmental, social, governance, and other risk factors into investment evaluation.

Global Market Insights

Providing actionable intelligence from international markets to support cross-border investment strategies.

 

About Magistral Consulting

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates, and Portfolio companies. Its functional expertise is around Deal origination, Deal Execution, Due Diligence, Financial Modelling, Portfolio Management, and Equity Research

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

Dhanita is a BD and Marketing professional with 6+ years’ experience in sales strategy, growth execution, and client acquisition; credentials include Stanford Seed (Stanford GSB), an MBA from USMS–GGSIPU, and a B.Com (Hons) from the University of Delhi. Expertise spans market research and opportunity mapping, sales strategy, CRM, brand positioning, integrated campaigns, content development, lead generation, and analytics; currently oversees business development calls and end-to-end marketing operations

FAQs

How does Magistral support portfolio management for buy-side clients?

Magistral assists in portfolio analysis, risk management, performance tracking, and rebalancing strategies, helping clients optimize returns and reduce exposure

How does Magistral integrate ESG into its services?

Magistral incorporates ESG metrics into due diligence, portfolio assessment, and research frameworks, helping clients align investments with sustainability and regulatory standards

Does Magistral support deal sourcing and investor outreach?

Yes, Magistral identifies and evaluates potential investment opportunities, and prepares presentations, reports, and pitch materials to facilitate investor engagement and co-investment opportunities

How does Magistral help clients in investment decisions?

Through in-depth market research, sector analysis, financial modeling, and risk assessment, Magistral equips clients with actionable insights to make informed investment choices

What buy-side research services does Magistral offer?

Magistral provides comprehensive buy-side research, including equity and sector research, financial modeling, deal sourcing, due diligence, portfolio monitoring, and investor reporting

 

Introduction to Sell Side and Buy Side

The financial world is full of transactions of all sorts. Whenever a transaction happens, there is a party who sells the asset and there is another party that buys the asset. The party selling the asset is the sell-side and the party buying the asset is the buy-side. Assets could be private or public companies, real estate, and other financial assets that give returns or value appreciation over time. Buy-Side research plays a vital role in the success of a transaction.

The parties could be an Investment Bank, A broker, A Company, A Hedge fund, An asset manager, or any other type of entity owning the asset or representing the owner

 

What is Buy-Side Research and Analytics?

Buy-Side Research and Analytics concern with identifying the full potential of the asset that is being bought. It attempts to answer the following crucial questions about the asset being transacted. Finding the asset itself to buy is the most crucial part of the Buy-side research

– Does the asset have the potential to generate returns or value appreciation over time?

– Is the asset valued rightly?

-Are there any risks associated with the asset? If yes, what are the risks?

-Is everything makes sense from a legal point of view?

-Are the documents right and portray the complete picture?

-Are there any other assets that may be more suitable?

Buy-Side research attempts to uncover all aspects of the asset to ensure the transaction achieves its objectives of maximizing returns for its investors

Buy-Side research is a regular function at institutions like Investment Banks, hedge Funds, Family Offices, Fund of Funds, Private Equity, Venture Capital and M&A departments in Corporates

Types of Buy-Side Research

Buy-side research could either be categorized as per the asset class like public companies, private companies, funds, etc. or as per the institutions like Investment Banks, Fund of Funds that undertake them

Type of Buy-Side Research

Buy-Side Research Types

Buy-Side Research- Hedge Funds

Hedge funds operate on multiple investment themes. However, the most common one, the long-short equity hedge fund uses the buy-side research which is predominantly equity research. This comprises researching the stocks which are being taken a position on, long or short. A fundamental analysis using methods like DCF or comparables is quite popular with hedge funds. Apart from researching the stocks, the industry, or geography, or any other aspect related to the stock or Hedge funds’ investment theme is also researched.  For hedge funds that take positions for the long term for a few stocks, the research is fairly detailed.

Buy-Side Research- Family Office

There is no set template or scope for buy-side research when it comes to family offices because investment mandates of family offices vary greatly. In family offices, buy-side research is mostly about equity research, manager research, asset research, and private company due diligence.  Quite a lot of partner and broker research is also common. Equity research as with hedge funds revolves around the fundamental analysis of the listed stocks. Manager Research is about finding asset managers who could deliver superlative returns as per the investment thesis of the family office. A typical example of this would be say finding hedge funds that are investing in China and have delivered more than 10% returns annually over 10 years or more, with moderate or little risk. The assignment involves the collection and analysis of huge data to find the best performing hedge fund managers for the family office.

Asset research is done for family offices with an investment philosophy around a specific asset. A typical example here would be getting into the details of a Real Estate asset deal or a Real Estate fund or a cryptocurrency-based fund.  Family offices work with all types of brokers, investment agents, and investment banks. Finding the right partner who has experience in the relevant area of investment and offers a competitive fee for the services is also common for family offices to research.

Buy-Side Research- Fund of Funds

Fund of Funds and Family Offices research funds to park their money. Here buy-side research concerns about finding the best manager to manage the funds. Information is collected on dozens of fund managers, analyze their performance for an objective evaluation on their potential to generate alpha.

Buy-Side Research- Private Equity and Venture Capital

Private Equity firms deal with both private and public companies whereas venture capital firms solely deal with private companies, sometimes very small ones. Buy-side research here revolves around the due diligence of the companies that are intended to be invested in. Another important aspect of the research here is finding the targets that fulfill the criteria for investments. A typical assignment would be to generate a list of all the SaaS firms with revenue more than $10 million, looking for Series B or beyond, with presence in the United States and products centered around blockchain.  This is typically followed by profiling the right set of companies for investments or acquisitions. For smaller companies, there is primary research that is done to talk with people who may have information about the industry and the company

Buy-Side Research- Investment Banks

Research here acquires as many types as the investment banks themselves. It can range from Equity Research as in the case of hedge funds or list generation and company profiling as in the case of Private Equity or Manager Research as in the case of Limited Partners or Fund of Funds.  The only difference here is that Investment Banks perform these tasks for their clients who may be looking for investments

Buy-Side Research-Corporate M&A

Bigger corporates continually evaluate targets for synergies with their business. Inorganic growth is a well-accepted way to grow. Not only growth but companies evaluate targets to acquihire, getting a tech, enter geography or industry or to eliminate competition. Buy-Side research in these cases pertains to building target lists as per the acquisition criteria and profiling companies.

Characteristics of High-Quality Buy-Side Research

Whether one is looking to outsource Buy-side research or building an in-house function. These are the qualities of good buy-side research, that should be paid attention to:

High Quality Buy Side Research

Characteristics of high quality buy side research

Depth of Research

Research on the surface seems easier, but intellectual curiosity is required to get into the depth of the information presented. A company that appears to be satisfying a criterion may not have any business in the key area that is the source of synergies. This requires studying lots of data and information to make sure if the target has all the right attributes for evaluation. Primary research and ghost interviews help the cause of getting into more details. Asking the right questions to management and analyzing the documents provided by the company holds the key to get into in-depth research.

Rapid Research

Deals are time-bound. Sometimes it requires quick and dirty analysis and other times it requires studying hundreds of documents over months. Whatever is the case, your outsourcing partner needs to be reliable about sticking to the promised timelines. Sharing interims before the finalized deliverables help too.

Expertise

Expertise in buy-side research ensures research is being done the right way. It ensures the right questions are being asked, the right information is being sought and the information is analyzed with all relevant angles to arrive at an objective opinion. Buy-side research outsourcing partner needs to be an expert in the financial sector generally and buy-side research particularly

Outcomes

All the research that does not yield any outcome is useless. Researching a target and then not acquiring it because of red flags pointed by research is still an outcome, which saves millions of dollars for the client. Whatever is the case the research outsourcing partner needs to keep an eye on the business outcomes of their research activities.

Accountability

Most research partners are great order-takers. If a list is to be generated, it is generated as suggested. But a great research services partner goes a step further and takes accountability. After making the list from secondary research, they do primary research to make sure the information collected from secondary sources is correct. They ask the right questions from Asset Managers to ensure the client gets what they are looking for and not “unverified” data in an excel sheet.

Engagement Flexibility

A great buy-side research outsourcing player offers complete flexibility to their clients, with scalable engagement models, and have contracts that carry no significant exit barriers. Whatever is the engagement model the work quality is not hampered

Magistral Consulting has helped multiple Investment Banks, Family Offices, Hedge Funds, and Private Equity firms in outsourcing buy-side research functions. It has clients based out of the United States, the United Kingdom, Europe, and Australia. To drop an inquiry get in touch here

About Magistral

Magistral Consulting has helped multiple funds and companies in outsourcing operations activities. It has service offerings for Private Equity, Venture Capital, Family Offices, Investment Banks, Asset Managers, Hedge Funds, Financial Consultants, Real Estate, REITs, RE funds, Corporates and Portfolio companies. Its functional expertise is around Deal origination, Deal Execution, Due Diligence, Financial Modeling, Portfolio Management and Equity Research

For setting up an appointment with a Magistral representative visit www.magistralconsulting.com/contact

About the Author

The Author, Prabhash Choudhary is the CEO of Magistral Consulting and can be reached at Prabhash.choudhary@magistralconsutling.com for any queries or business inquiries.