Northern Trust Company NTRS has signed an agreement to take a minority stake in Essentia Analytics, Ltd., a pioneer in using a cutting-edge cloud platform, to help asset managers and active locators master their behavioral biases and to get an improved alpha.
Leveraging historical data and behavioral science, the Essentia platform will operate as an appendix to Northern Trust’s Whole Office, a program that simplifies client access to new technologies, services and solutions throughout the investment lifecycle. .
Essentia infuses data analytics, client-focused “nudges” and specialized behavioral mentoring to create a strong feedback loop for active investment decisions. It also helps investment teams understand where and why they are coming to the top and where their gaps lie, helping to implement an unbreakable growth cycle.
As part of the agreement, Northern Trust’s asset servicing division will provide the services of Essentia Analytics to its clients and will be able to easily interface managers’ historical trading and other data directly with the company. research and advice. The company will also provide working capital to Essentia to facilitate its expansion.
By working with fundamental data from Northern Trust’s investment portfolio, derived from Essentia’s proprietary process, investors can understand their adept and less successful investment patterns to refine decision-making around stock selection, sizing , add/reduce, in/out timing, as well as scale/scale.
Pete Cherecwich, President of Corporate and Institutional Services at Northern Trust, said: “Essentia’s next generation data analytics technology enables institutional investors – both asset managers and asset allocators – integrate data-driven comments into their investment process. Through our Whole Office partnerships, Northern Trust clients around the world can access industry-leading technology, skills and services designed to help them make repeatable and measurable decisions in their quest for alpha.”
Clare Flynn Levy, Founder and CEO of Essentia Analytics, said: “As asset managers and allocators seek to maximize alpha, it is crucial that they are able to identify behavioral biases and gaps. in decision-making and adjust their approach accordingly.
Northern Trust has been focused on launching new businesses in recent years amid macroeconomic headwinds. Additionally, the company’s innovative, technology-driven hedge fund administration capabilities provide compelling client propositions.
Additionally, the company continues to benefit from its strong wealth management business with diversified products. Additionally, the latest acquisition of Parilux Investment Technology, LLC will strengthen its growth prospects.
The stock has gained 6.8% over the past six months, surpassing the 4.8% gain of the industry to which it belongs.
Image source: Zacks Investment Research
Northern Trust currently carries a Zacks Rank #2 (Buy). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Similar steps by other banks
A growing number of financial services organizations, including banks, are turning to convenient and seamless digital services for their customers.
Earlier this month, JPMorgan Chase JPM has signed an agreement with Volkswagen AGVolkswagen Financial Services, a subsidiary of VWAGY, with the aim of entering the automotive industry and strengthening its digital payment skills. Under the deal, the bank will take a nearly 75% majority stake in the automaker’s payment platform, Volkswagen Payments SA.
In July, Sterling Bancorp STL announced its investment in BrightFi’s parent company, Verdigris Holdings, Inc., to expand Sterling’s digital offerings and facilitate innovation in banking and finance. Sterling also announced a Banking as a Service (BaaS) partnership with BrightFi in April.
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