UBS has launched Quant HQ as a new service for quantitative trading firms. The new offering uses solutions from the Swiss bank’s Prime Services and Direct Execution units.
According to UBS, despite the fact quantitative trading firms represent from 30% to 50% of global market liquidity, brokers’ trading services are typically geared towards long-only buy-side funds.
Similar to the functionality offered to long-only asset managers, Quant HQ will offer quant firms access to UBS infrastructure and smart order router. Through the global venture, the bank will work with quant clients to tailor the services to best meet their strategic needs.
“In some cases the solution we deliver is completely unique and won’t resemble what we provide to other firms,” Charlie Susi, global co-head of Direct Execution, UBS, told theTRADEnews.com. “Because we have combined specialised capabilities from our Prime Services business and our Direct Execution business, quant clients can elect to work with us in a variety of ways. These firms may also want our portfolio trading desk to consult in the optimisation of their models or complex trading cost analysis.”
The experience UBS has in providing hedge funds with tools like business model consultation, to IT advisory, to capital formation in addition to its own experience in quantitative trading means it is well placed to offer this type of service, according to Susi.
“There may be cases in which a firm wants to get set up very quickly and are not necessarily in need of such a complex IT solution,” he said. “Conversely, there are cases that require a far more intricate infrastructure for which some components may be outsourced, but other aspects cannot. Up to now, many of these firms had to bring together a variety of brokers and platform providers to serve their needs, because front-to-back resources were not available or scalable to their requirements.”
Susi added that the demand for customised trading strategies is part of a growing trend of greater convergence between the high-touch and electronic trading services offered by the sell-side. A number of firms, including Credit Suisse have repositioned their trading businesses by combining high- and low-touch service offerings.