Meet the data firms cashing in on the quant-investing boom

TRADERS AND their Bloomberg terminals are seldom parted. Some 330,000 people fork out around $25,000 annually to access Bloomberg’s suite of services: financial-market data; graphing and pricing tools; the ability to chat with other market participants. These functions are so vital for bond traders, hedge-fund managers and pension-fund investors that, when the pandemic closed offices worldwide, many lugged their terminals home in taxi cabs.

As quantitative investing swells and algorithms dominate financial markets, though, the demand for data is changing. A human stock-picker might prefer a single slick platform through which they can build charts and chat to their broker, but quantitative firms want to be plugged into vast data sets that they can sift for signals. One of the quickest-growing slices of the market-data industry for the past five years has been direct selling to investment managers, rather than traders. And a motley, fragmented bunch of providers are having enormous success selling proprietary data directly to quantitative managers. A reminder of this came on November 30th when S&P, a rating agency and financial-information firm, said it would buy IHS Markit, a credit-data provider, for $44bn. The tie-up is the second-largest acquisition announced this year, behind only a $56bn Chinese oil-pipeline deal in July....