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Northern Trust invests in Essentia Analytics to boost active manager alpha

Wednesday, September 22, 2021
Opalesque Industry Update - Northern Trust has reached an agreement to take an equity stake in Essentia Analytics, Ltd., a provider of behavioral analytics and consulting services that utilizes a cutting edge cloud-based platform to bring together historical data and behavioral science to identify and address biases in thinking that impact investment performance.

The addition of Essentia behavioral analytics solutions is an extension of Northern Trust Whole Office, a strategy that facilitates client access to new technologies, services 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 maximize the value of their data and optimize investment performance," said Pete Cherecwich, President of Corporate & 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."

Essentia Analytics combines data analytics, client-driven "nudges" and specialist behavioral coaching to provide a powerful 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.

Working with foundational investment portfolio data from Northern Trust filtered through Essentia's proprietary process, investors can gain insight into their more skilled and less successful investment patterns, at both the firm and individual level, in order to optimize decision making.

"As asset managers and allocators seek to maximize alpha, it is crucial that they are able to identify behavioral biases and decision-making deficiencies and adjust their approach accordingly," said 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."

Strategic consulting firm Acclinate LLC introduced Northern Trust and Essentia.

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