With the need to do more with less having never been more prevalent, the time for smart decisions is now asserted expert panellists from across the buy-side gathered at The Finance Hive’s CMX conference in London this week.
The importance of innovation being addressed holistically rather than by individual teams – and trading desks – in isolation was a key point raised.
“When it comes to that trying to do more with less, it’s not just the trading desk, it’s the whole firm,” asserted Mohammad Sohail, head of trading at Sarasin & Partners, highlighting that opportunities can be closer than one might think.
Cathy Gibson, global head of trading at Ninety One, further explained: “Often if you look around the business, my needs are actually overlapping with what a portfolio management team’s needs or actually what our risk and performance team can leverage off.
“[…] You’ll actually find there are probably other people in your business who need the tool as well. So, I might end up paying for a third of the data that I’m getting, but the rest of the business will pay for the rest and then even if you do get the quality support, it’s making sure that you’re fully maximising that spend throughout the business and that you’re not working in silos and building solutions that are not scalable cost systems.”
Eric Böss, global head of trading at Allianz Global Investors, agreed, highlighting transaction cost analysis (TCA) as a particular area of opportunity.
Read more – Conscious usage of TCA: Making trade analytics more actionable
Speaking to his own approach, Böss shared: “We’ve been teaming up with risk and compliance on data sets. Why is it that combined is a different tool for post-trade combined checks when our TCA tools could do this? It’s easy, wins, it’s obvious and the larger the organisation gets, the higher the probability we see that.”
More with less
Elsewhere, panellists discussed what it truly means to make the most of what’s at hand as cost pressures and market flows continue to rock the boat.
Speaking from his perspective at head of trading, EMEA at BNY Investments, Martin Hendry, agreed with the notion that ‘doing more with less’ was more prevalent than ever, adding that it is increasingly important to understand the nuances across the space.
“We’ve seen a few causes in the last two years – we’ve seen record flows out of European equities, so assets are going down, less fees coming in, and then we’ve seen a lot of fee pressure from compliance.
“So again, the income for the asset managers is being reduced but there’s still work to be done after that, wins to be generated. So how do we do that? A key point is of course automation and then there’s the obvious outsourced element as well. Asset managers can look at their core focus, their bread and butter – where they generate the most alpha – but as businesses evolve, they take on bits.
“Liontrust acquired businesses over the last eight years and there’s been bits that didn’t fit in… but we still need to find solutions, and partnering with an outsource provider for smaller bits of the business is that.”
Speaking to this, Gibson further added that it is vital to ensure that innovations lead to real wins.
“I would agree that are user cases for outsource execution and I know we’ve used the more for less phrase a lot but I’m cautioned to be careful that outsourcing isn’t doing less for more, which means less service as in an execution function for your client and then passing the charges on to the end investor, the outsource piece.
“[…] It’s like any mode execution channel, it’s using it in a smart way.”