Outsourced trading boosts investment performance for asset managers: State Street

Outsourced trading boosts investment performance for asset managers: State Street
Report found widespread performance gains across North America, globally.
MAY 30, 2024

Most asset managers and asset owners who use outsourced trading providers have reported investment performance gains, according to new research from State Street.

Its poll of 300 participants across North America, EMEA, the UK, and APAC with AUM from under $30 billion to more than $50 billion, found that 85% in North America reported improvements through outsourced trading.

“We have long believed that providing excellent service starts with knowing our market better than anyone else. With this ground-breaking research, we hope to shed light on the emerging move towards outsourced trading and provide clarity regarding the significant benefits it can offer,” said Dan Morgan, head of Portfolio Solutions, State Street. “We are pleased that our expertise has been enhanced with the addition of the CF Global Trading team, now helping us deliver stronger offerings and services to clients.”

In addition to investment performance, 55% of respondents said they have seen increased efficiency and three in ten reported reduced costs. But those who are yet to use outsourced trading cite concerns around cost effectiveness (61%), loss of control over their trading activities (56%), and a lack of understanding about its potential benefits (56%).

Those looking at outsourced trading solutions prioritize flexibility, customization, and technical integration capabilities of potential providers.

“The findings from this survey highlight the potential and the real value outsourced trading is bringing to the industry, and we are well-equipped to help clients understand the offering and help with the integration,” said Scott Chace, co-founder of CF Global Trading and head of Trading for Portfolio Solutions at State Street.

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