[ I N D E P T H | O U T S O U R C E D T R A D I N G ] of outsourcing .
“ If you look at the last couple years there has been an evolutionary rate of acceptance which has accelerated recently . It suggests that the concept of outsourcing or supplemental trading has become institutionalised .”
Traders and portfolio managers across the industry are seemingly eager to be part of these conversations - not just about the dawn of outsourcing but also when it comes to technological change across the market .
When it comes to those truly at the coalface of the trading processes , overlooking their acumen should
“ In terms of who makes that decision [ to outsource ] of course it is down to the people who are motivated by , and tasked with , looking at overall operating model transformation and cost efficiency – which are generally COOs and CFOs .”
REBECCA CROWE , MANAGING DIRECTOR AND CHIEF OPERATING OFFICER , BNY MELLON MARKETS
be done at a firm ’ s own peril .
“ We as an outsourced trading community are always going to come up against the ‘ fear factor ’. However , by not being present in the set-up of a new regime [ buy-side traders ] are missing opportunity to have a say and effectively create even greater job security with a hybrid approach ,” asserts Hantman .
Across firms , senior executives appear to be increasingly taking this on board , attempting to find the perfect balance between saving costs and weighing the true , long-lasting impact of making those big moves .
The market is moving , keep up Against the backdrop of the growth of the outsourced trading industry , the landscape is set to continue its evolution in marked ways .
Gray predicts two key developments , which are now beginning to emerge : “ That growth would lead to new entrants and to more consolidation amongst providers . This would result in polarisation , with a few key players and a larger number of smaller specialists leading the growth .”
Recent times have seen swathes of bigger and bigger firms turning to outsourcing in one way or another , however The TRADE understands that some of the largest firms have been embracing this strategy for quite some time and big moves have already transpired .
Examples just from just the last six months include UKbased investment management firm Waverton – which has £ 9.1 billion AUM – outsourcing some of its trading to Northern Trust Integrated Trading Solutions ( ITS ), Nordea outsourcing the portfolio management of its emerging market bond funds to Metlife Investment Management , Singapore-based investment manager New Silk Road outsourcing its trading to Northern Trust , and most recently Stifel and Marex unveiling a new outsourced trading partnership under a broker referral scheme .
From Tourmaline ’ s perspective , Hantman asserts that the firm has been trading for multiple trillion plus asset managers for years , though these are unwilling to be named publicly .
Similarly , Crowe confirmed to The TRADE earlier this year that BNY Mellon “ absolutely ” has large scale clients on its books already . BNY announced a partnership with Goldman Sachs Asset Management in March concerning global trade execution services in EMEA , the US and APAC markets across fixed income , FX , derivatives and ETFs .
Speaking to The TRADE about the FX space specifically , Burke shares that BBH has also seen continued interest from larger managers who have FX resources
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