In the first episode of this highly-anticipated digital feature, we outline what outsourced trading is, exploring the various models and arrangements that can be adopted, before uncovering whether outsourcing execution can actually save money for asset managers.
Focusing on the concerns surrounding the outsourced trading trend, part two of this digital feature asks who pays for the service and if this whether the cost is justified, before considering if outsourced trading desks can outperform centralised buy-side trading desks.
After exploring how providers manage potential conflicts of interest in part two, the final part of this digital feature looks at other complex issues that outsourced trading presents, before concluding with thoughts on how the trend will impact buy-side traders in the future.
Outsourced trading has sparked fierce debate in recent years.
Buy-side traders believe their front-office execution team can still give asset managers a competitive edge, while others believe a third-party can either supplement or replace the trading entirely, for the better of the business.
A long-serving function of the active asset management industry, considered by many a jewel in the crown, trading desks now face arguably their biggest challenge yet in the form of outsourced trading desks. Born out of industry headwinds and changes in market structure, the trend has sparked c-suite interest as an alternative to the centralised trading desk.
But the trading desk is not a function destined to transition quietly into the outsourced world.
The TRADE and Global Custodian are proud to present this first of its kind digital feature exploring the development. With exclusive interviews from outsourced trading providers such as BNP Paribas, Cowen, Stone X Group, TORA and Wells Fargo, alongside views from current and former buy-side heads of trading, we throw light on some of the burning issues that encompass the outsourced trading trend.
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