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Where is the decision to outsource trading coming from primarily ? With our current and prospective clients , we ’ ve discussed cost and operational efficiency , access to live traders with expertise in new asset classes and all global markets , technology enhancements , and overall trading desk optimisation as driving factors behind outsourcing their trading . The bottom line is , if an investment manager can increase fund performance by eliminating implicit and explicit deadweight loss resulting from an inefficient trading desk architecture , they should – at a minimum – explore the concept further .
How did you decide the structure of your offering and how does it differ to competitors ? Outsourced trading already existed but the firms and their traders providing these services were functionally no different than that of an introducing broker or sell-side sales trader . There were a limited number of outsourced trading services offering a use case that we felt was genuinely accretive to the investment manager . I was determined to build a structure that allowed us to be the exact mirror image of a sophisticated buy-side trading desk , with just one structural difference : our traders would not be employees of the investment manager . Meraki Global Advisors ’ unbundled offering embraces the ethos of what outsourced trading is : operating as an unconflicted true extension of the investment manager – a quality that represents the model ’ s core value proposition . A true outsourced trade management solution , like the service we provide , strictly communicates orders to the client ’ s execution counterparties as an authorised trader of the fund . Our firm has stood by our promise to provide clients the highest level of service in the industry by meticulously managing the number of client mandates we take on , maintaining a 3:1 client to trader ratio , and only providing a full or supplemental trade management solution . These aspects allow our traders to be familiar with the inner workings of each client they support . We also do not offer backup trading services unless we are a supplemental solution and the client ’ s internal trader needs backup periodically . A trader that is not continuously involved in the implementation leg of the investment thesis and seldomly trades as a back-up trader , can be hazardous in our opinion .
What are the differentiated remits or functions that your traders provide that sets them apart from your competitors ? When I look at the current landscape , I don ' t think anyone prioritises requisite buy-side experience quite like we do at Meraki . The portfolio manager / trader relationship is paramount and revolves around more than just trade execution . A seasoned buy-side trader understands the portfolio manager , as well as portfolio , execution , and counterparty risks and when welcomed , a deep understanding of the investment thesis to sift through information for the portfolio manager , and to anticipate and be prepared for follow up questions . There is a very tangible understanding of the comprehensive set of factors that comes with managing risk , and you can ' t teach that experience unless you ' ve sat on a buy-side trading desk . That shared experience removes an immediate hurdle that an outsourced trading provider will encounter if they do not have the requisite in-house talent . Meraki ' s traders offer an initial level of comfort that vastly expedites the learning curve of how we can best service a portfolio or fund manager . This allows the client to focus on their core strategy without the disruption of market volatility , setting both parties up for long-term success .
How do you see traditional asset managers ’ decision to outsource trading impacting the industry as a whole ? Financial services are a perpetually evolving efficiency machine . Therefore , the migration to outsourced trading will continue to increase as traditional asset managers seek to realise the benefits of localised market access , asset-specific hedging structured by their traders , and cost savings . The outsourced solution is fundamental in democratising the buy-side landscape by lowering not only the barrier to entry , but also , optimising operating costs across the spectrum of managers . The successful platforms that will grow in market share will have to diligently scale with a focus on their client ' s longevity over simply accumulating additional revenue streams . That prioritisation has always been part of our ethos .
What have been the key developments for outsourced trading over the last year ? Geographic diversification has been key . To offer additional value beyond direct market access – something highlighted by the pandemic – Meraki has always covered the global trading day with physical seats in relevant geographic locations . Our trading skillset not only encompasses the multi-asset spectrum , but our traders have also traded live markets globally , with few local market nuances that they ’ ve not encountered . In addition , the increasing complexity of local market structure and regulatory changes will continue to be a valuable ' solve ' for the best outsourced platforms to offer clients , alongside the march of technological advancements and the trader ’ s proficiency in the everevolving tools utilised to enhance fund performance , all of which have been areas of focus this past year .
What are Meraki ’ s priorities moving forward ? Continuing to grow by scaling and fine tuning the scope of services and tools we provide our clients is a key priority . The injection of large language models and AI tools is dynamically changing the way trading desks operate , and we remain committed to offering top tier and cutting-edge technological service and efficiencies to our clients . Given the nascent nature of our business , high level decision makers are sometimes reticent to make the decision to outsource their trade management . However , Meraki ' s structure and talent provides a truly bespoke solution that is best-of-breed , evidenced by our successful growth servicing investment managers that range in size , complexity , and trading remits . I could not be more excited about our continued growth .
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