Buy-Side Technology Awards 2014: Best Buy-Side Data Analytics Tool—Essentia Analytics

It’s tough being a start-up in the financial services industry, regardless of how great one’s products or services might be, the extent of one’s seed capital, or the depth of intellectual capital and experience one’s principals might possess. This is a universal phenomenon and a phase that all start-ups need to successfully negotiate in order to progress to the next stage of their lives, which, if they make the cut, should present few, if any, existential crises.

London-based Essentia Analytics, with a headcount of 15, headed up by Clare Flynn Levy, hedge fund veteran and ex-Beauchamp Financial CEO, wins the best buy-side data analytics tool category, which, given that this is the first year this category is on offer, is fitting that it goes to a start-up.

Like all fledgling technology vendors, Essentia has its work cut out, but if ever a new vendor appeared to have a bright future, Essentia is it. After all, it’s not often that start-ups are able to catch the eye of one of the alternative asset management industry’s leading lights, let alone actually sign it, which Essentia did earlier this year when it added London-based GLG Partners—a subsidiary of Man Group, consistently in the world’s top 10 hedge fund groups in terms of assets under management—to its client roster. Since that initial success, Essentia has signed an additional four hedge fund and traditional asset management clients in the US, the UK and Germany, while GLG recently rolled out Essentia to 24 of its European equity managers.

Essentia’s premise is simple: It uses technology to help fund managers improve their performance by analyzing their investment skills, in context, providing them with a data-driven feedback loop on the effectiveness of their investment processes.

While Essentia might not be the first technology firm to use software to attempt to separate skill from luck by analyzing trading and holdings data, it is the first to market with a platform that records and analyzes the market and the physical and emotional context around which investment decisions are made. Some of this data is collected automatically and some is collected via EssentiaNote, the firm’s investment journal.

Essentia might not be out of the woods quite yet in terms of its long-term viability, but it well on its way thanks to a healthy mix of an outstanding team, a great product, and a growing client list. Expect to hear more from this vendor in the coming months.

Essentia’s premise is simple: It uses technology to help fund managers improve their performance by analyzing their investment skills, in context, providing them with a data-driven feedback loop on the effectiveness of their investment processes.

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• Essentia Analytics