How Hedge Funds can use SAR + AIS data to make better Investment Decisions

Canonical URL

Do not index

Portfolio managers, would you be willing to count cars in parking lots to outperform the market?

You don’t have to. Earth Observation (EO) satellites can do it for you.

That’s why hedge funds are investing heavily in alternative data, a market projected to reach $135.72 billion by 2030. In 2025 alone, they’ll spend $15.4 billion, with that number expected to cross $40 billion by 2030. Why? Because when information is scarce, the edge is everything.

Berkeley Haas professors Panos N. Patatoukas and Zsolt Katona put the supposed advantage of alternative data to the test. They analyzed 4.8 million satellite images of parking lots across 67,000 U.S. retail stores, provided by RS Metrics, to see if hedge funds could gain an edge by trading on satellite imagery of parking lot traffic.

The answer was a decisive yes.

👉 Their research found that:

The informational advantage yielded returns of 4–5% within just three days of quarterly earnings announcements, which was a significant return over such a short window.

Satellite imagery improved the accuracy of earnings forecasts, giving analysts an informational edge ahead of consensus.

Earnings announcements backed by satellite-informed analysis tended to see stronger stock price reactions, showing that the market saw this data as credible.

Trading volumes were also higher around these announcements, suggesting investors acted more decisively when such insights were in play.

📖

Dive deeper into their research: On the Capital Market Consequences of Big Data: Evidence from Outer Space

Now imagine applying the same principle beyond retail stores.

What if you could track ship-liners in transit, monitor port congestion, and gain richer situational awareness in maritime disruptions like the Suez Canal blockage or Red Sea attacks?

Even more critically, what if you could uncover ship-to-ship (STS) transfers — the quiet handoff of crude oil, liquified natural gas (LNG), or other cargo that conceals true trading volumes and supply flows?

When these transfers go undetected, the informational edge that hedge funds depend on disappears.

This is where the game changes. The same type of informational edge that hedge funds gained with parking lot satellite imagery can now be scaled to the world’s oceans - a market far larger, far more opaque - where even a small insight can move billions.

The Rise of Alternative Data in Hedge Fund Management

Investment firms largely use traditional, publicly available data like financial statements, stock price shifts, company filings, and other economic indicators. Hedge funds, although a type of investment firm, are different.

For readers unfamiliar with what a hedge fund does, we’ve added a note in the toggle below.

What is a hedge fund?

Hedge funds are investment companies managing money for wealthier investors and larger institutions like pension funds and university endowments. Fund managers aim to derive much higher profits than regular stocks and bonds by using cutting-edge strategies.

Hedge funds have greater freedom to use advanced, even experimental tools and data — short-selling, borrowing money, and investing in assets that aren’t always available to average investors — as compared to typical investment funds. They have more flexibility to "beat the market" to deliver higher returns.

Hedge funds aggressively seek alternative data sources to gain a competitive edge. Unlike traditional firms, they often rely on unconventional datasets — satellite imagery, credit card transactions, shipping data, and even web traffic — to uncover patterns and insights before they're visible in mainstream financial reports.

This allows hedge funds to make faster, more informed bets on market movements, positioning themselves ahead of broader institutional investors.

Let’s consider satellite data — the premise of our piece.

In the early 2000s, some hedge funds were already experimenting with satellite data. Technology and data pipelines existed as early as 2001 (look up GeoEye, GlobeXplorer, SkyTruth), but only the most quantitative and resource-rich funds experimented with them.

Cut to 2018, and about 78% of the hedge funds studied in a Preqin report were found to use some kind of alternative data in decision-making strategies.

What started with credit card swipes and web traffic has expanded into everything from geolocation to satellite feeds. And among all these sources, satellite data has emerged as one of the most compelling, offering a literal “big picture” view of global economic activity.

Can hedge funds pick stocks from space?

Yes, and they already have.

In 2020, Ursa Space Systems was using satellite imagery to assess the impact of the COVID-19 pandemic on global oil inventories. It tracked storage tank capacity, oil tankers, and flaring activity in oil fields — data that gave investors unique insights into supply, demand, and pricing.

But Ursa is just one piece of a much larger puzzle. Hedge funds need this satellite data and they need it in massive volumes. This demand has given rise to an entire ecosystem of intelligence platforms such as Kpler, Vortexa, S&P Global, and others. These companies aggregate data from multiple sources into unified intelligence dashboards that hedge funds can trade on.

Kpler, for example, built its platform by combining multiple maritime data sources. It recently acquired Spire Maritime (largest AIS ship tracking network globally) to “deliver decision-defining insights across the global trade sector.”

Similarly, S&P Global acquired ORBCOMM Inc.’s AIS data services business to strengthen its alternative data capabilities.

Together, these moves sketch out a market being consolidated under a few players and hence creating white spaces where new entrants with differentiated tech can generate alpha. PierSight is built for that.

PierSight

At PierSight, we’re building a constellation of satellites (to start launching from 2026) for persistent monitoring of all activity on the surface of the global seas. Once in orbit, these satellites can capture and transmit microwave signals to deliver a relatively consistent feed (give or take 30 minutes) of all human and industrial activity at sea.

How do we do it? The SAR + AIS advantage

Synthetic Aperture Radar (SAR)

SAR uses microwaves instead of visible light, which means it pierces through clouds, smog, rain, and even works at night. While optical imagery captures what we see (like a photo), SAR captures surface properties like texture and moisture, revealing hidden details.

Since ~67% of Earth’s surface is covered by clouds at any given time, SAR guarantees uninterrupted visibility into global seas.

✅

For a deeper dive into the applications of SAR, read our blog.

Automatic Identification System (AIS)

Think of AIS as a digital “name tag” for ships. This system helps ships and maritime authorities automatically share and receive information about a ship’s location, direction, speed, and other essential metrics.

AIS is crucial for monitoring traffic and establishing maritime safety, and when ships tamper with it, SAR fills the gap.

Why should hedge funds pick PierSight’s satellite constellation?

Persistent monitoring, that’s why.

Unlike platforms relying primarily on AIS data, PierSight fuses SAR + AIS to unlock insights that AIS alone cannot provide — for instance, detecting STS transfers.

Why does this matter?

Because STS transfers are currently one of the biggest blind spots in maritime trade data. They usually happen in the open seas, away from main routes, where oversight is weakest. Ships must be extremely close — often within 10 meters — for a transfer to occur. With a 30m resolution, two vessels appear as one indistinct block in traditional satellite imagery. But with PierSight’s Persistent Wide Area Maritime Surveillance (PWAMS) offering up to 1m resolution, those two ships are clearly distinguished.

👉 With that level of clarity, we can not only detect but also classify STS transfers in real time — giving hedge funds an informational edge that legacy AIS-only providers can’t match.

And because each PierSight satellite can cover ~2 million sq km per day, we can spot these hidden transfers across vast swathes of the open ocean — the exact areas where they’re most likely to occur.

Traditional satellite imagery (~30m resolution)

PierSight’s SAR imagery (~1m resolution)

Why should hedge funds care about satellites tracking the high seas?

Consider this scenario for funds investing in the oil market.

Certain sanctioned countries are prohibited from selling their oil and natural gas on the international market. However, dark ships still manage to carry sanctioned oil to buyers, undermining legal oil supplies and market prices.

With traditional data, authorities (and thereby fund managers) cannot track unsanctioned trade.

However, our marine surveillance satellites can track these ships' movement by imaging entire swathes of the ocean (~2 million sq km per satellite per day). Hence, no matter how the ship tampers with its AIS systems, its location cannot be concealed from these “eyes in the sky”.

Funds utilizing this satellite data won’t be caught off guard by unseen trade runs. They’ll know exactly how global supply lines are shifting due to legal and illegal vessel movement, enabling them to act on supply chain intelligence and build alpha.

What can hedge funds do with SAR + AIS data?

If you’re working at Citadel, D.E. Shaw, Bridgewater, BlackRock, or the like, think of the SAR sensors + AIS feed as your eyes and ears at sea. Here are a few scenarios in which this data can help make better trades:

Detect unsanctioned trade: Dark vessels smuggling sanctioned oil often distort supply-demand balance. SAR exposes these flows early, giving funds an edge in anticipating compliance risks and price shifts.

Monitor global choke points: Queues in the Suez Canal, Panama Canal, or the Strait of Malacca drive freight rates and ripple through equities tied to global trade. Real-time visibility lets funds anticipate rate spikes and disruptions.

🚢

SAR technology was instrumental in imaging the Suez Canal blockage in 2021. The blockage led to $89 million in losses for one shipping company alone, so you can imagine the impact it had on the financial markets at the time.

Spot disruptions fast: PierSight’s data banks pinpoint collisions at sea, oil spills, and port closures no more than 30 minutes after they occur. Funds can use these real-time inputs to trade insurers, tanker owners, or crack-spread futures way ahead of news cycles.

Track vessel behaviour: Ships adjusting speeds or rerouting to avoid risks reveal fuel costs, delivery timelines, and ESG practices. Impact funds can reward efficient operators and blacklist those skirting rules.

Leverage historical intelligence: PierSight tracks past marine activity, including piracy hotspots and attack patterns. If a vessel strays into risky regions, our satellites flag it, hence giving funds early warning to mitigate downside risk.

Future-proof with AIS 2.0 (VDES): PierSight’s orbital array is being built to deploy AIS 2.0 (VDES), reducing dropped signals and enabling two-way satellite communication. The result: more reliable coverage, real-time alerts, and sharper situational awareness — keeping fund managers closely apprised of the assets they are betting on.

Funds can do more with SAR. But we don’t know what more.

We’re designing a marine surveillance system with far-reaching consequences. But PierSight is headed by scientists and domain experts, not fund managers with years of experience.

We don’t know the depth and breadth of the competitive advantage in global finance that SAR data can provide.

The people handling major and minor portfolios and navigating everyday markets have to tell us.

So, let’s talk. Tell us ways in which you think fused SAR + AIS data might help make better trade decisions or avoid bad ones.

Join our early access program. You’ll be among the first to get access to our data, and we’ll work with you to shape the future of persistent maritime intelligence.

Help us build something that works specifically for you.