The outsourced trading industry is continuing to enjoy a surge in demand in 2025. Once considered a niche solution for costconscious asset managers, it has now become a central pillar for many buy-side organisation across the globe. The concept has reached hedge fund and asset managers of all shapes and sizes, and with a more palatable co-sourced model available for some, there are few who would consider outsourced trading completely off the table.
At first glance, the drivers of this growth seem obvious: the need to control costs, extend global trading coverage, and increase operational efficiency. Yet a closer look reveals a much richer and more nuanced picture. Regulatory changes, market structure reforms such as T + 1 settlement, the ongoing challenge of hiring and retaining trading talent, and the expanded capabilities of outsourced trading providers are all reshaping the buy-side’ s calculations.
The TRADE’ s annual outsourced trading survey highlights just how deeply efficiency concerns are driving the trend. This year, 75 % of respondents cited operational inefficiency as the main challenge they are looking to address by outsourcing- a modest but telling increase from 73 % in 2024.
For some asset managers, the message is clear: running a trading desk in-house is becoming increasingly complex, resource-intensive, and operationally burdensome. The costs of building and maintaining the systems, compliance processes, and global networks required to trade competitively have reached a point where many firms see outsourcing not just as a cost-saving measure, but as a means of ensuring they can compete at all. Yet efficiency is only part of the story.‘ Pursuing growth while controlling costs’ has once again ranked as the second most cited driver in our survey, a position it has held consistently for the past three years. The consistency is revealing. Asset managers are under constant pressure to expand strategies, enter new markets, and service more sophisticated client demands, all while facing fee compression and budget constraints.
Outsourced trading enables them to do this without the heavy fixed costs of an in-house desk. By tapping into external providers with global reach and multi-asset expertise, managers can extend their ambitions without taking on the full operational and financial burden.
However, concerns remain around cost increases stemming from inefficient processes following the decision to outsource.
Speaking to The TRADE, one buy-sider highlighted that“ from an analytics perspective, outsourcing execution can introduce additional implicit costs,” specifically around“ delays and suboptimal fills”.
Talent in, talent out The third-ranked driver in 2025 also tells an important story. Concerns around rehiring relevant experience and talent came in ahead of regulatory change and compliance challenges this year, mirroring the ranking from 2024 but marking a departure from 2023, when regulatory concerns occupied third place.
This shift reflects the persistent and growing difficulty of hiring experienced buy-side traders. The trading desk is no longer a simple execution function; today’ s buy-side traders must navigate fragmented
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