Fund Managers’ Greatest Difficulty in Accessing High Quality Data


Fund managers’ difficulties in obtaining reliable data for fixed income investments offers plenty of scope for even more services from the leading credit rating agencies.

New research with fund managers in North America who collectively manage around $600 billion, reveals they are placing a growing emphasis on both the quality of the data used in their investment processes and on having access to the technological capabilities to efficiently process data. Six out of ten (60%) believe this is crucial to achieving above-average returns in the future.

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Rating Agency Accused of Using Original, Then Rewritten Data

Agencies, Data

Refinitiv ESG’s rewriting not a one-time event

Prof. Dr. Kornelia Fabisik, Assistant Professor of Finance, Frankfurt School, reports on some discoveries at one of the ESG rating agencies at the conference “ESG Ratings: The Good, the Bad, the Ugly” of the Corporate Governance Institute (Prof. Dr. Julia Redenius-Hövermann) at the Frankfurt School of Finance & Management.

Refinitiv ESG is a key Environmental, Social, and Corporate Governance rating provider offering “one of the most comprehensive ESG databases in the industry”, and its ESG scores have been used (or referenced) in more than 1,500 academic articles since 2003. The scores were initially constructed by ASSET4, a company acquired in 2009 by Thomson Reuters, which became Refinitiv in 2018. Refinitiv ESG data are employed by major asset managers, such as BlackRock, to manage ESG-related investment risks.

“We document large rewriting of ESG ratings of Refinitiv ESG.” The same set of firm-year observations downloaded September 2018 and September 2020 provides evidence. For the full sample Kornelia Fabisik observerd a rewriting of 21% on average, 18 % median.

“Rewriting is not a one-time event”, warns Kornelia Fabisik. “Refinitv ESG continues to adjust the data ex-post, unannounced.”

“In April 2020, Refnitiv ESG changed the methodology used to determine the ratings.” There were two key changes: Treatment of boolean metrics and introduction of a propietary materiality matrix.

The ESG score deviations are related to firm characteristics, especially past stock returns. Firms that performed better in the past experienced rating upgrades. The ESG score deviations strongly affect the classification of firms into different ESG quantities.

“Has data rewriting stopped post methodology change? No,” ist the answer of Kornelia Fabisik, “the database changes on a weekly basis.” She shows concrete examples.

“ESG ratings industry follows an investor-pay model, whereby the data vendors compete on how useful their ratings are for ESG investments.”

“44% of carbon emission obsesrvations (Scope 1 CO2 emissions) have in some way been altered.” Specifically, 23.6% firm-years were added (i.e., data were missing in the 11/2019 download, but filled in for the 02/2021 download), 1.6% were deleted, and 18.4% were modified. The data rewriting affects all years and not just those closest to the end of the sample period.”

Prof. Dr. Kornelia Fabisik’s conclusions, as presented at the Frankfurt School conference:

  • The large differences in results that we document have implications for empirical test strategies using Refinitiv ESG data. Moving forward, researchers and investment professionals need to verify whether the original or rewritten ESG scores are needed to perform their tests.
  • For example, if the practitioners are unaware of the changes, asset managers could erroneously be benchmarked against the rewritten data that were unavailable at the time of portfolio formation (look-ahead bias).
  • She argues that the results reflect the incentive of the data provider to introduce a positive relationship between ESG scores and returns in the data, in order to demonstrate that their ESG scores are useful for data users developing ESG-related investing strategies.
  • Given that ESG research and ESG-related investment strategies are likely to grow even furhter, this is an important caveat for adhering to the status-quo.

Finance Working Paper N° 708/2020, August 2021, Abstract:

The explosion in ESG research has led to a strong reliance on ESG rating providers. The article documents widespread changes to the historical ratings of a key rating provider, Refinitiv ESG (formerly ASSET4). Depending on whether the original or rewritten data are used, ESG-based classifications of firms into ESG quantiles and tests that relate ESG scores to returns change. While there is a positive link between ESG scores and firms’ stock market performance in the rewritten data, the authors fail to observe such a relationship in the initial data. The ESG data rewriting is an ongoing rather than a one-off phenomenon.

man wearing gas mask standing beside store facade

Crime Detection and Prevention Through AI-based Rating

Crime, Data, Products, Profiling, Read

All eyes on MULTIEYE BOS Manager

Artec technologies AG (ISIN DE0005209589) strategically develops its business with authorities and organizations with security tasks (BOS). It was not just the storming of the Capitol in the United States or the attempt at the Berlin Reichstag that showed that security authorities need to integrate the monitoring and evaluation of social media and other sources of information more closely in crime detection and prevention. The BOS business had already generated a large part of artec’s annual turnover. The cash flow of the company is characterized, among other things, by recurring revenues from cloud and services, an important characteristic in the revenue structure for investors who want to benefit from the ongoing trend at artec technologies AG. Artec sees considerable growth potential in the BOS area for the coming years.

The prerequisites for using this potential are not only given by numerous German security authorities, such as around 50 percent of the state criminal police offices, but also by the fact that artec has positioned itself as a supplier of video information systems, among other things. In 2020, the company successfully positioned itself as a system supplier – everything from a single source.

The heart of this success is the MULTIEYE BOS Manager: a private cloud-based software platform for mobile emergency services, situation centers and control centers. It was developed with specialists from German security authorities and has proven itself over the past year as a central management system for the preparation, implementation and follow-up of classic observation missions. The individually configurable hardware for field operations is also supplied by artec. All processes are compliant with data protection regulations, and artec attaches particular importance to maintaining digital data sovereignty. In view of the exponentially increased complexity of the legal requirements, this is a unique selling point that should not be underestimated.

In addition to the existing BOS customers, a European authority is currently testing the BOS Manager, reports the company, as well as discussions with other authorities in the national and international market. In order to accelerate sales, artec plans to increasingly make systems available to potential customers for a certain period of time and thus convince them to buy or rent.

“The work of the security authorities is becoming more and more complex. In addition to classic observation by cameras, there are also media such as the Internet, TV and streaming. The possibilities for crime detection and prevention are huge, as are the resulting amounts of data, which represent a great challenge. In doing so, isolated solutions from different providers, as they are still often used in authorities today, reach their limits, ”says artec CEO Thomas Hoffmann. “A system platform is needed to structure so-called dirty data, for example from social media channels, video material provided by citizens and other sources, and to merge it with metadata from video observation or other databases. Among other things, this is the prerequisite for subsequent cognitive analyzes, as they are increasingly used in the fight against terrorism.”

Anyone looking for a data collector and processor for security authorities that complies with data protection regulations will find what they are looking for at artec. As a specialist in data collection and processing from audiovisual sources, artec can offer security authorities real added value. With the two platforms XENTAURIX and MULTIEYE, artec has a leading spectrum of sources in the market, from TV and radio to a wide variety of cameras (including body cameras, surveillance systems) and social media streams such as YouTube, Facebook and Tik Tok. The artec systems have been used successfully in practice for years – e.g. by security authorities and media companies as well as in shopping centers and for license plate recognition.

Artec’s future prospects are further brightened by the expansion of the BOS Manager to include AI functions. The expansion of the functionality of the BOS Manager in the current year and beyond is probably the most important strategic goal for artec. Due to increased demand from the customer base and upcoming negotiations, artec’s technology specialists are making appropriate preparations. According to Diepholz, it is planned to expand the manager with essential performance features for area observation in border regions, for large-scale police situations, events and demonstrations. This is to be achieved initially through the stronger integration of XENTAURIX as a source supplier from TV and social media. The integration of other data sources such as drone recordings is also planned. In addition, the possibilities of comparing and linking with existing audiovisual information, such as license plates, faces, motion sensors and video material (dirt data) provided by citizens, are to be expanded through artificial intelligence. In addition, artec will further expand the already existing offer of guaranteeing security authorities technical support around the clock (24/7).

For all of these functions, precise knowledge of the legal situation is essential. In Germany in particular, the protection of privacy is considered a valuable legal asset. Without many years of experience, those competitors who dare to venture into this business area solely because of their technical understanding, but not also because of their legal expertise, can face significant fines or claims for damages. § 823 I BGB expressly names the legal interests of life, body, health and freedom as well as the absolute right to property as such, the violation of which constitutes an obligation to pay compensation. Rights include property and other rights. Property as an absolute right, that is to say, a right that affects everyone, is the only point of contact for the interpretation of “other rights”. As a result, “other rights” can only be those that are absolute. Other rights also include general personal rights.

As a guideline for balancing interests, the jurisprudence developed the theory of spheres. According to this, the requirements for a justified intervention are higher, the more protected the sphere of intervention is. The intimate sphere includes the world of thoughts and feelings. Diary entries, information on the state of health, attitudes towards sexuality etc. enjoy absolute protection. Every intervention – apart from extreme cases – is fundamentally illegal.

Domestic and family life are part of the private sphere. It is also protected by personal rights, but there are exceptions and tolerance obligations. A person in public life, for example, has to tolerate a greater degree of interference with the general right of personality than non-public persons. The social sphere is the least protected. This includes all interactions between an individual and their environment, such as the exercise of their profession. Interventions in this sphere can easily be justified. At this point, the decisive factor is a good argumentation and dealing with the individual case.

An example of an application for one of artec’s goals illustrates the legal situation in the social sphere: after a criminal offense such as that committed at the G20 summit in Hamburg, authorities call for cell phone videos to be made available. Hundreds of videos are then uploaded. The future expansion development of the BOS Manager analyzes the data, sorts out countless duplicates and provides the authorities with a pre-selection of the videos relevant to the investigation. The officers can assess the situation from different angles. In addition, faces, license plates, conspicuous objects or clothing are marked with a “digital fingerprint”. Artificial intelligence can then be used to search for faces or cars in existing databases – e.g. from traffic monitoring or other security cameras. In this way, a movement profile of offenders can be created before and after the event.

CoStar: A Star Rising Higher

Agencies, Data

The Washington based CoStar Group (WKN: 922134 / ISIN: US22160N1090, Symbol: CSGP), with a staff of over 4,300 worldwide, is a company to watch in the rating industry, since CoStar is a leading provider of commercial real estate information, analytics and online marketplaces. In addition to its importance to the rating industry, it is also rated “investment grade” by leading credit rating agencies (Moody’s, Fitch Ratings).

Founded in 1987, CoStar conducts expansive, ongoing research. The claim of the company is to produce and maintain the largest and most comprehensive database of commercial real estate information. CoStar bought Thomas Daily in Germany, which was already well known among rating analysts not only in Germany. Thomas Daily became a subsidiary in 2016.

CoStar offers a significant suite of online services enabling clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities.

  • Along with Thomas Daily, CoStar comprises a number of strong brands, such as
  • STR, which provides premium data benchmarking, analytics and marketplace insights for the global hospitality sector.
  • Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids.
  • LoopNet is the most heavily trafficked commercial real estate marketplace online with over 7 million monthly unique visitors.
  • Realla is the UK’s most comprehensive commercial property digital marketplace.
  • Westside Rentals,
  • and
  • form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties.
  • By December 17, 2020, the US Federal Trade Commission (FTC) has cleared CoStar Group’s acquisition of Homesnap, Inc., an industry-leading provider of technology solutions to the real estate industry. CoStar and Homesnap submitted the proposed merger for FTC review in late November 2020.
  • CoStar announced its acquisition of, setting the stage for its entry into residential real estate marketplaces.

Homesnap powers the nation’s most productive agents who regularly rely on having its accurate, real-time MLS information and enhanced productivity features at their fingertips. Supported by a consortium of hundreds of the country’s largest multiple listing services (MLSs), more than 1.1 million real estate agents have access to Homesnap’s free professional product, Homesnap Pro, representing over 90% of the residential real estate agents and listings in the United States. Homesnap’s public residential real estate portal showcases 1.3 million active property listings and tens of millions of home shoppers use the Homesnap website and app to look for a home.

“Adding Homesnap to CoStar Group’s network provides significant complementary value to our existing arsenal of broker and agent-centric tools, directly benefiting the entire industry,” said CoStar Group founder and CEO Andy Florance. “We are proud to join CoStar Group and leverage their more than 30 years of knowledge and experience in property data, software and marketing to take advantage of this significant growth opportunity,” said John Mazur, CEO of Homesnap.

CoStar Group’s websites attracted an average of approximately 69 million unique monthly visitors in aggregate in the third quarter of 2020.

Civil Address

Advisors, Analysts, Clients, Data, Experts, Investors, Read

Every rating has to start with the unequivocal identification of people. It is not just about the identity of debtors and their civil address registration, but also that of managers in companies such as board members, or who else is responsible for a legal entity. In order to enforce claims against a natural person, in most legal systems around the world the address at which a person is registered is important. A personal guarantee from a managing director is worthless to creditors if their whereabouts cannot be determined or if an alleged address proves to be incorrect.

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General Approach to Find a Current Address for Someone

A general approach to find a current address for someone could generate the following data:

  • The person’s private address / current home address, as well as any known old addresses.
  • The social media profiles, if they exist.
  • Photos from the Internet.
  • Access to the email addresses to can the person you are looking for by email.
  • Various user names that are used on the Internet.
  • Also acquaintances, relatives and friends might be shown, which is particularly interesting if you know family members.
  • Current bankruptcy applications or whether there have been ones in the past.
  • Search for the phone number and get the landline number and/or the mobile phone number.
  • Training and employment of the person you are looking for (schooling and academic education)

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