Cowen Outsourced Trading: Best Outsourced Trading Solution – Experienced traders, well established and highly regarded buy-side order management and execution technologies overlaid with a totally transparent operating model is what drives the core of the service Cowen Prime Services provides its clients.
The firm’s business model allows clients to know which broker they are executing every trade with and what they are paying for that service. Cowen further employs independent trade cost analysis firms to verify and rate execution quality under the best execution practices.
Jack D Seibald, Managing Director, Global Co-Head of Prime Brokerage and Outsourced Trading at Cowen expands on this: “We have significantly grown and reshaped our outsourced trading effort over the past year with the hiring of more than a half dozen traders, bringing our team to 26 globally. This allows us to offer our clients 24×6 coverage with traders proficient in local markets located in the US, UK, and Hong Kong.
“Importantly, most of our traders have extensive experience on the buy-side and thus bring a clearer understanding of what it’s like to work for portfolio managers. A number of our new additions also bring additional asset class experience, including options, futures and fixed income instruments.”
He notes that the firm’s most significant recent development has been the success it’s experienced in raising awareness of the benefits of outsourced trading among mid-sized as well as much larger investment management firms. “We have won new outsourced trading mandates based on our model that is differentiated in the market by its transparency and the comprehensive support effort that comes with trade execution,” Seibald notes.
On the back of Cowen’s developments and expansion, clients can enjoy two principal benefits. Firstly, they can avail themselves of the services of a team of more than two dozen experienced traders who bring a wide range of specific market and asset class expertise. While clients are typically assigned a principal trader and a back-up, the entire team is available to assist in specific regional markets during those market hours, or with specific asset classes, i.e. options, futures, etc.
Second, clients can have a true, full service buy-side trading desk; with buy-side order management and execution technologies as well as trade support services, at a price well below what it would cost to build or maintain internally.
Looking ahead, Seibald says the greatest challenge is getting the investment management industry to veer from its historical way of conducting business through internally run trading desks. He comments: “Outsourcing has become mainstay throughout much of the economy, even in the investment management industry, which has increasingly seen the value in outsourcing non-investment related functions.
“Outsourcing the trading function has been around for quite some time but has been mostly utilised by managers in the alternative space. The bigger opportunity would be to convince the much larger traditional segment of the investment management industry, and we are working diligently to inform them of the benefits of doing so through seminars, written materials, and a more focused outbound sales/marketing effort.”
In view of this, Cowen’s objectives are to further inform the market of its differentiated offering, which is lower cost and more comprehensive, and gain share with both hedge fund and traditional investment managers.
Having been in existence since 1995, Cowen Prime was built by former investment managers to provide a variety of financial institutions such as hedge funds, institutional investors and family offices, with turn-key solutions to relieve their operation burden. The aim of this is to allow their clients to focus on their core competencies in investment.
Jack Seibald
Managing Director, Global Co-Head of Prime Brokerage and Outsourced Trading, Cowen Inc
Jack Seibald was a co-founder and managing member of Concept Capital Markets, LLC until its acquisition by Cowen Group, Inc. in September 2015. He has been affiliated with the firm and its predecessors since 1995, and has extensive experience in prime brokerage, outsourced trading, investment management, and research dating back to 1983.
