Northern Trust Buys Stake in Behavioural Science Firm

Northern Trust has reached an agreement to take an equity stake in Essentia Analytics, a provider of behavioural analytics that uses a cloud-based platform to blend historical data with behavioural science to identify and address biases in thinking that can impact investment performance.

The service will be part of Northern Trust Whole Office, a strategy that facilitates client access to new technologies and solutions across the investment lifecycle.

“We continue to pursue a strategy that combines Northern Trust’s global architecture with innovative partners like Essentia to help clients maximise the value of their data and optimise investment performance,” says Pete Cherecwich, president of corporate and institutional services at Northern Trust. “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. 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.”

The service combines data analytics, client-driven “nudges” and specialist behavioural coaching to provide a feedback loop for active investment decisions. It helps investment teams understand where and why they succeed and where their blind spots are – and delivers the framework to enable a cycle of continuous improvement, the bank says.

“As asset managers and allocators seek to maximise alpha, it is crucial that they are able to identify behavioural biases and decision-making deficiencies and adjust their approach accordingly,” says Clare Flynn Levy, founder and CEO of Essentia Analytics. “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.”