Tailor-made trading desks: How the buy side is embracing an outsourcing model

A rising number of asset managers across the globe are exploring the idea of outsourcing some or all of their trading desk to a third-party provider. Already popular in North America, this practice is gaining traction in Europe and Asia as firms discover the increasingly compelling arguments in favour of outsourced trading solutions.

Numerous institutional investors of all sizes, as well as hedge funds, family offices and specialist trading firms, have taken advantage of the expertise and depth of experience that an outsourced trading desk provider can offer. Wider coverage, better execution, new sources of liquidity, trading anonymity and increased operational flexibility – these are some of the benefits they have reported.

In this report, The Realization Group speaks to experts at some of the firms helping asset managers to understand and unlock those benefits. We hear from Daemon Bear, chief executive officer at Anderson Bern Capital Management, Chris Elliott, prime brokerage and outsourced trading sales at Cowen, Michel Finzi, global head of product management at financial technology group Enfusion, and David Berney and Michael Broadbent, both of whom are principal consultants at Ergo Consultancy. Together, they explain the growing appeal of outsourcing from a business perspective as well as the different factors that asset management firms should consider.