[ W E L C O M E L E T T E R ]
A year older , a year wiser
Welcome to the second iteration of The Outsourced Trading handbook , a dedicated magazine which continues to grow at the same rapid pace as the service that it covers . We learnt a lot through compiling the first Outsourced Trading Handbook and accompanying survey in 2023 and we received astounding feedback on the initiative , which served as the first client perception survey for the industry . Our survey sees clients rate the service they receive from their providers , awarding scores and delivering qualitative feedback , whilst also enlightening us on the rationale behind deciding to outsource and exactly how they are using the service – with regards to full outsourcing versus co-sourcing and the variety of models they utilise . What we discovered once again is a great level of satisfaction with providers . The global average score of 6.04 outperformed our other proprietary surveys such as prime brokerage , execution management systems and algorithmic trading , as a comparison . So what else changed this year ? The answer is a lot ! Cowen ’ s outsourced business was acquired by Marex from TD , and BNY cast its outsourced trading line out into the sea only to catch a whale in the form of Goldman Sachs Asset Management - thereby confirming the trend of ‘ the big fish ’ coming into the fray . We saw some big people moves , a partnership between Tourmaline and BBH , Northern Trust bag a whole bunch of new clients and an array of research papers telling us how the concept continues to grow . With regards to the latter , Coalition Greenwich said this summer that 10 % of asset managers had paid trading commissions to outsourced trading platforms over the past year in a survey of more than 100 buy-siders . The concept of co-sourcing is one of the most interesting of trends in the space , as even the most hardened of old school buy-side traders appear to be warming to the idea of outsourcing at least part of their trading activities to a third party to cover time zones , asset classes or staffing gaps . Perhaps just as exciting is speculating on what the future holds : More big providers ? More big clients ? More M & A ? Almost certainly , but let ’ s save some of that for future issues . For now , we hope you enjoy this supplement which contains the latest updates on the sector ( page 18 ), buy-side views on outsourced trading ( page 22 ) and a deep dive into why the service is easy to offer , but often difficult to get right ( page 6 ).
Jonathan Watkins Publisher ,
The TRADE & Global Custodian
2024 // Outsourced Trading Handbook // 3