[ T H O U G H T L E [ A D D E P E A R R S H T M I P E N | S T T | O N H E X D ] products and regions they ’ re trading . We get to know their investment process and become familiar with their portfolio , monitoring it in real-time , adding value both to the portfolio management and business teams . This coverage supports not only trades , but also treasury function and stock loan . Our client-centric approach to outsourced trading is markedly different from traditional firms since we don ’ t have a legacy infrastructure . We were able to grow our business the way our clients wanted it , as opposed to what fit into an existing model . Another key differentiator at StoneX is our people . We have experienced traders ; the vast majority have been founders or partners at well-known hedge funds with 20 plus years of experience across multiple regions and products . Rather than following a volume model and covering as many clients as possible , we aim to be a part of the investment process , acting as an extension of the firm rather than just a resource . It ’ s also important to note that we trade across asset classes . We noticed that our clients were trading globally across various asset classes , so we developed systems and connectivity to handle not only equities but also credit , rates , FX , and commodities . This diversification is atypical for the street but aligns with StoneX ’ s broader infrastructure .
What are some of the most common service structures or operational models that your clients choose when using StoneX for outsourced trading ? We offer two main service models . The first is our full suite , where clients use us either as their trader exclusively or as their dedicated secondary or primary trader in a different region . Alternatively , you might have a trader who is handling all cash orders , and we handle FX hedging and options trading for them . We fill in for specific mandates that our clients need assistance with , either by region or product . The second model caters more to emerging managers , or those just launching , who want a medium-touch execution service where the portfolio manager isn ’ t solely responsible for routing all orders and overseeing all executions . We can provide a lighter-touch execution service that is still substantial enough to help individuals get started without having to internalise that function . They can lean on us for support .
How does StoneX ’ s middle-office capabilities differ from its peers ? The middle-office manages the relationship between the life cycle of the trade from execution to settlement . This is important because many firms have multiple prime brokers and SMAs , making the allocation and settlement process complex . Those positions , especially in financial centers , are costly and extremely hard to fill . We provide our clients with a low-cost alternative , sometimes bundling that service with our execution services and taking the burden off them . We have extensive in-house expertise that handles our own settlement business , which we also second out to our clients . This is a unique offering that we believe nobody else provides , and we have seen significant interest and uptake in that product .
Do your services allow an independent fund to have the same scale advantages of working at a multi-manager firm , but without being part of one ? There ’ s definitely a bifurcation in terms of where people go when they launch a fund . Traditionally , when they spin off from their existing manager , they ’ ve gone out on their own . The growth and proliferation of multi-manager funds have offered them an alternative . However , there are still people out there who want to have their own business but don ’ t want to be fully burdened by everything that comes with that . That ’ s the equaliser we provide themwe allow them to maintain all their economics but build their team at arm ’ s length .
Do you have any sort of future developments or expansions planned out for your group ? We ’ ve recently expanded our expertise by adding credit trading through the hire of a very senior credit trader . We ’ re continuously exploring new products and verticals based on our clients ’ specific needs . Geographically , while we ’ ve traditionally been more US-centric , our presence as a global company allows us to pursue expansion into Europe and Asia . These expansions aim to complement our existing traditional staff and capabilities .
How has the StoneX team adapted its outsourced trading services in response to shifting industry dynamics and recent volatility in the markets ? Our dedicated coverage model allows us to maintain a consistent level of service regardless of market conditions . We reserve bandwidth for our clients , making us agnostic to short-term fluctuations in market volatility or trading volumes . Unlike our competitors , whose service levels may drop during busy periods , we remain consistent by not overselling our capacity . Our goal is not just to amass a large client base ; we focus on developing strong partnerships with clients who want the same high level of service irrespective of market conditions .
How do you see outsourced trading evolving in the future ? The growth of outsourced trading is closely tied to the cycle of fund launches , which has seen a lull this year due to rising interest rates and the shifting investment landscape . We ’ re adapting by closely monitoring our clients ’ needs and market trends . We ’ re seeing expansion beyond traditional buy-side services as our clients start to include sell-side clients . Some clients , especially in research and banking , are looking to us as their sole execution provider , and we expect this momentum to continue .
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