Northern Trust is to take an equity stake in Essentia Analytics, a provider of behavioural diagnostics and a consulting service, that utilises a cloud-based platform to analyse and address biases in thinking that impact investment performance.
By studying historical data and behavioural science, the Essentia platform will act as an extension of Northern Trust’s Whole Office, a programme that facilitates client access to new technologies, services and solutions across the investment lifecycle.
Essentia Analytics combines data analytics, client-driven “nudges” and specialist behavioural coaching to provide a powerful feedback loop for active investment decisions.
Essentia helps investment teams understand where and why they succeed and where their blind spots are — delivering the framework to enable a cycle of continuous improvement.
Working with foundational investment portfolio data from Northern Trust, filtered through Essentia’s proprietary process, investors can gain insight into their skilled and less successful investment patterns to optimise decision making for stock picking, sizing, adding/trimming, entry/exit timing, as well as scaling in/scaling out.
Pete Cherecwich, president of corporate and institutional services at Northern Trust, says: “Essentia’s next generation data analytics technology allows institutional investors – both asset managers and asset allocators – to embed data-driven feedback into their investment process.
He adds: “Through our Whole Office partnerships, Northern Trust clients across the globe can access advanced technology, skills and services designed to help them make repeatable and measurable decisions in the quest to deliver alpha.”
Clare Flynn Levy, founder and CEO of Essentia Analytics, comments: “We look forward to the opportunity to work with Northern Trust to bring enhanced productivity and investment performance to the front-office of clients across the globe.”
