THOUGHT LEADERSHIP

Outsourced trading set to be more global than ever before

Michael Rosen, global co-head of prime brokerage and outsourced trading at Marex, delves into the key themes across the outsourced trading landscape, discussing the impact of increasing globalisation, what the future holds for the space, and how Marex’s offering is evolving to meet these industry shifts.

How has the recent acquisition by Marex impacted your outsourced trading offering?

Michael Rosen, global co-head of prime brokerage and outsourced trading at Marex

The acquisition has benefited us in several significant ways. Marex’s end customer base is distinctly different from what we previously had; they have a strong focus on futures and commodities on a global scale. Their customers are also very interested in trading and receiving support in other asset classes, beyond those they were accustomed to with Marex. By combining our strengths in equities and fixed income trading with Marex’s expertise in futures and commodities, we’ve created a more diversified and comprehensive offering.

Now, with a global footprint that includes outsourced trading for securities, futures, and commodities, we have become a highly attractive partner to a variety of entities. Many of these entities were previously unaware that outsourced trading could meet their needs, especially in the futures and commodities space. While outsourced trading is well-established in equities, it’s less common in futures and commodities, with fixed income falling somewhere in between. This expanded capability positions us to better serve our clients across all these asset classes.

It’s been quite a year for the outsourced trading landscape, what are some of the biggest themes you are seeing?

The themes in outsourced trading have remained fairly consistent over the past few years, but they are becoming more pronounced. Outsourced trading is undoubtedly becoming more global and extending beyond equities into additional asset classes. This globalisation is driven by increasing client demand for services that can support trading across multiple regions and asset classes.

In addition to this, there is a growing acceptance of outsourced trading among a broader range of entities, beyond just hedge funds. We are seeing more interest from institutional investors and corporates, who are recognising the value of outsourcing their trading operations. This shift is contributing to a significant increase in demand, and we are responding by expanding our offerings and geographical reach.

How are you catering for those trends within Marex?

We are continuing to build on our existing strengths while expanding into regions where Marex has established office bases and personnel. This expansion has provided us with access to new relationships and markets, particularly in the Middle East and Asia, where outsourced trading is gaining traction.

We’ve had a presence in Hong Kong for some time, but Marex’s additional offices in Singapore, Australia, and other key locations are now enabling us to develop business in these areas. We’ve been visiting clients and building on the strong relationships that the Marex team has cultivated over the years. This collaboration has been essential in helping us engage more deeply with local clients and offer services tailored to their specific needs.

Singapore, which serves as Marex’s Asian headquarters, will be a major focus going forward. As one of the most evolved financial services and business centres globally, Singapore is key to our efforts, complementing what has already been achieved in Hong Kong. The integration of our expertise in equities with Marex’s established presence in these regions strengthens our ability to deliver comprehensive, global trading solutions.

Just how big can this market get and how do you think the winners on the service provision side will be determined?

There’s no question that the market can become substantially larger, with expectations for continued, steady growth. While it’s difficult to pin down specific global figures, it’s clear that the share of outsourced trading within the overall commission wallet has grown significantly. A few years ago, outsourced trading might have accounted for around 5% of the market, but it’s now industry surveys point to it being at least twice that size.

Looking ahead, it’s not unrealistic to expect outsourced trading to comprise a quarter or even a third of the entire market. This growth will likely be driven by the expansion of services and the ability to cater to an increasingly diverse range of client needs.

Are there any other key attributes of an outsourced trading provider you think are crucial over the next 12 months?

Global coverage is essential. Many of the outsourced mandates we’re receiving involve a hybrid approach—trading the US markets for Asian and European clients, or vice versa. Therefore, a global footprint is crucial for any provider hoping to be a meaningful player in this space.

Additionally, the ability to trade across multiple asset classes is increasingly important. 

At Marex, our approach has always been to ensure that a client has all the information needed to say ‘yes’! It’s about making sure that the market fully understands the scope of our offering and where exactly we can add value. If you’re not clearly communicating your capabilities, you risk losing out on potential opportunities. 

The goal is to maximise our chances of winning every piece of business we’re competing for, and with the combined strengths of Marex, we’re in a stronger position than ever to do just that.