[ I N - D E P T H
sourced trading provider, CF Global. “Anonymity can
be helpful for some funds, whilst there are benefits to
others of facing the street. It is a fluid situation that is
constantly evolving as the sell side continues to change
and as the market moves away from bundled commis-
sions. The final outcome remains to be seen, but we
are active in both types of workflow and the service
is bespoke. Each client can have their own default, or
change trade by trade, the flexibility is theirs."
Buy- or sell-side?
Larger asset managers or hedge funds might not
be as enthusiastic about outsourcing execution to a
third-party. Speaking at TradeTech Europe in April,
the head of trading at $975 billion asset management
firm Invesco, David Miller, told delegates during an
Oxford-style debate that, at this stage, his firm would
not consider outsourcing its execution processes.
Citing Invesco’s expertise and in-house capabilities,
Miller added that he doesn’t believe an outsourced
trading provider could execute better than his traders
can. “I would say some of the traders we have are
best-of-breed anyway,” he said. “We’ve got the experi-
ence, the technological back-up as well, we’ve got the
systems and the support, so, no, we wouldn’t consider
outsourcing our trading.”
Where the front-office outsourcing provider could
potentially add value for buy-side firms of all sizes is
sourcing liquidity and market access, and this is where
the difference between an outsourced trading desk
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O U T S O U R C E D
T R A D I N G ]
“We’ve got the experience, the
technological back-up as well, we’ve
got the systems and the support,
so, no, we wouldn’t consider
outsourcing our trading.”
DAVID MILLER, INVESCO
and an agency broker emerges.
For example, if a UK-based asset
manager sent an order to an agency
broker for execution in Asia, that
order will only interact with the
flow that the agency broker sees
in Asia. An outsourced trading
provider, on the other hand, will
have access to broader parts of the
liquidity spectrum through various
relationships, including with the
agency broker.
“In most cases, we actually have
better access to the sell-side than
asset managers building those
relationships on their own because
of the sheer volume of our desks
globally,” says Daniel DiSpigna,
chief operating officer at Tourma-
line Trading. “We’re trading with
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