Essentia Insight combines sophisticated data analytics and specialist behavioral consulting, and has helped clients uncover 94 basis points per annum of excess return — without taking on additional risk.
Essentia works with portfolio managers to continuously improve their performance by helping them play to their strengths, avoid their weaknesses, and make fewer unconscious errors.
Essentia Insight can help unlock the behavioral alpha – the excess return that results from mitigating one’s biases – hidden in your decision-making process.
Measurably-better investment decisions
Essentia Insight runs your historical trade and behavioral data through our industry-leading analytics engine. Our proprietary algorithms use machine learning to detect behavioral patterns – the good ones that contribute to alpha, and the poor ones that destroy it.
Review the analysis regularly with your dedicated Essentia Insight Partner. Our Insight Partners are ex-fund managers who can help you distill the data to reveal the behavioral patterns that have the most impact on your performance.
Use these insights to formulate actions and process enhancements going forward. A key aspect of this feedback loop are customizable nudges that notify you automatically — ex-ante — when a decision-point is approaching or a detrimental behavioral pattern may be emerging.
“Essentia’s data-driven feedback loop pulls out what’s working and what’s not… and helps drive meaningful conversations to maximize results for our clients.”
Amy Oldenburg – MD, Morgan Stanley Investment Management
Essentia Insight is used by active equity portfolio managers — long-only and long-short — worldwide. Our total assets under analysis are in excess of $150 billion. Our clients are typically funds in excess of $1 billion in assets under management, and comprise a wide range of trading frequencies and degrees of concentration.
The Insight service starts at $80,000 per year, depending on the number of portfolios involved. (See Insight Enterprise for more on our discounted multi-portfolio pricing.) Given that the service has been shown to deliver an average of 94bps per annum in improved performance at the portfolio level, the ROI on the Insight investment is often massive.
Insight currently handles equity and equity-like instruments (ETFs, CFDs with an equity underlying). We’re in the process of adding analysis of other instruments – if you’re interested in helping us prioritize which come first, let us know.
You supply the historical and daily trade and holdings data, via CSV file. For a high likelihood of statistical significance, we look for at least two thousand trades, including adds and trims, as a starting point. We supply the price and reference data, courtesy of Factset. Essentia has a tried-and-tested process for making the data upload process simple to establish and automate, and our dedicated Data Onboarding Team is there to help, every step of the way.
We provide a simple template and work closely with your team to onboard your data. But we also have ready-built interfaces with a growing number of leading OMS, PMS and IBOR providers, streamlining the data onboarding and maintenance process and minimizing (or eliminating) the effort required from the investment manager’s data team.
No. Our clients are typically investors, rather than traders – many with very long term horizons. We work with portfolios with any concentration level and turnover frequency. Because our analytics are flexible, they can be calibrated to reflect the uniqueness of your investment strategy and the time frame you are using to measure success.
Nudges are entirely optional, but they have succeeded in helping our clients form better habits where journals, spreadsheets, and research management systems have failed.
Download an introduction to Essentia Insight: