Reprinted with permission from HFM Global
Jack Seibald and Michael Rosen, of Cowen, extoll the virtues of their outsourced trading system.
As outsourcing as a business concept has increasingly gained traction throughout the economy, it’s also become more widely accepted in the investment management business in recent years. In fact, institutional investors now seem quite comfortable allocating capital to investment managers who diligently employ outsourced solutions for CFO, COO and operations, compliance, information technology and cyber-security services. In many cases, allocators see the engagement of independent third parties for such services as additional sets of eyes and ears on the managers that will help to ensure operational integrity.
Outsourced trading is another such service that’s been available to investment managers in some form for some time, but, like other outsourced services, it is now being used more frequently by investment managers. While more brokerage firms have entered the space, most practitioners still offer this service primarily as a trade execution only solution. In our view, this leaves managers free to find solutions for other necessary trade and operational support services.