Global custodian Northern Trust has bought an equity stake in UK-based behavioural analysis firm Essentia Analytics.

The transaction will see Northern Trust make Essentia’s analytics and consulting services available to its clients via its Whole Office offering, a strategy designed to feature new technologies and fintechs via the Northern Trust platform.

Essentia’s service uses a combination of analytics, client alerts and behavioural coaching to help active managers with their investment decisions.

The deal is indicative of the growing interest to use behavioural science to enhance the investment process among a number of asset managers. In August, Dutch firm NN Investment Partners appointed a lead behavioural scientist within its innovation team.

“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.

According to Northern Trust president of corporate and institutional service Pete Cherecwich, the arrangement will enable asset managers and allocators to “embed data-driven feedback into their investment process”.

No financial details of the transaction were disclosed.

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