By Isabelle Bousquette

A tool for crunching billions of rows and millions of columns of data is the stuff of nightmares for some. For London-based hedge fund Man Group, it was a dream.

When the firm couldn't find something on the market to, for example, consistently and quickly pull and analyze the entire universe of daily stock prices for all time, it sought to make it a reality.

The result is ArcticDB, an open-source tech tool the firm developed internally over the course of a decade and is beginning to commercialize now among customers like financial software and media company Bloomberg. Bloomberg signed on in 2023 and has been working with Man Group to build on the tool ever since.

"I do think there's a big shift in the financial markets and especially the capital markets, this awareness that our customers need to be able to leverage large data and more and more data sets, and they need to build more rigorous models," Bloomberg Chief Technology Officer Shawn Edwards said.

Man Group was founded in 1783 and managed about $175 billion in assets as of last September.

The "tic" in its ArcticDB refers to tick data, or the minute individual price changes that occur every time a stock is traded, sometimes just microseconds apart. The tool was designed to handle the enormous stream of tick data that comes in every day, though it can also use daily or weekly stock price data.

"Think of it as like an industrial-scale crunching of enormous things that look a bit like Excel spreadsheets," said Man Group Chief Technology Officer Gary Collier, referring to Microsoft's ubiquitous spreadsheet tool.

But it isn't simply a jumbo-capacity Excel. ArcticDB users primarily see and write lines of code, and while they can run models on the data that present smaller relevant charts, they aren't looking directly at the mother of all spreadsheets.

Man Group's quantitative analysts, or quants, use the tool to analyze markets, build risk reports and look for signals to help them "find alpha" -- in other words, capture above-average returns on investments.

Man Group is working to commercialize ArcticDB as financial markets companies, and capital markets companies in particular, are seeking increasingly sophisticated technology for ever more rigorous data analysis, Edwards said.

Bloomberg has licensed ArcticDB and built it into its BQuant analytics tools, which it sells to financial services companies. The need to conduct time-series analysis across a large number of data points is only growing, Edwards said. Bloomberg ingests over 400 billion market ticks every single day.

To be sure, there are other powerful data analysis tools on the market. For example, Excel can display about one million cells on the grid, but can process still-larger data sets via aggregation and cloud processing, Microsoft said.

And other tools have been built to handle enormous data volume, said Jason Strimpel, founder of PyQuant News, a resource hub for quants and tech finance professionals. But ArcticDB stands out for its speed and the way it naturally integrates into existing data ecosystems, Strimpel said.

The tool hasn't seen drastic uptake among other hedge funds since its introduction, however, perhaps partly because it competes with existing workflows and partly because some hedge funds might be wary of using tech created by a competitor, Strimpel said.

Bloomberg's Edwards believes its applications could also go beyond finance to industries like pharmaceutical research.

"More machine learning and data science is being applied in every field, " he said. "And you need these kinds of tools if you want to do that kind of quick analysis, experimentation, exploration of data."

Write to Isabelle Bousquette at isabelle.bousquette@wsj.com

(END) Dow Jones Newswires

January 16, 2025 07:00 ET (12:00 GMT)

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