Cowen Outsourced Trading: Best Outsourced Trading Solution Provider – The near immediate global lockdown that resulted because of the Covid-19 pandemic and the shelter-at-home policies that followed has to be the biggest challenge clients have faced this year. The struggles they encountered led to a sharpened need for trading assistance and connectivity.
Cowen Outsourced Trading: Best Outsourced Trading Solution Provider – The near immediate global lockdown that resulted because of the Covid-19 pandemic and the shelter-at-home policies that followed has to be the biggest challenge clients have faced this year. The struggles they encountered led to a sharpened need for trading assistance and connectivity.
While most investment managers had well-designed business continuity plans in place, few, if any, had work-from-home built into such plans. “We received significant inquiry for assistance in executing trades and managing trade flow to away brokers. This appears to have largely been driven by technology issues, including the lack of proper equipment and sufficient bandwidth/connectivity at peoples’ homes,” comments Jack Seibald Managing Director and Global Co-Head of Prime Brokerage & Outsourced Trading at Cowen.
He explains how even firms which had robust BCPs in place did not expect this way of working to be in place for an extended period of time. Discussing investment and trading strategies during the heightened volatility is difficult when teams are working remotely. Hence, there is an increased need for connectivity through a firm like Cowen.
“Our outsourced trading solution is widely connected to brokers across the globe. Our trading team was able to assist clients pretty seamlessly, even during the height of the volatility and volume in March and April. As a firm, we had implemented our business continuity plan early, and quickly pivoted to the work-from-home solution by moving equipment located at offices to traders’ homes and installing enhanced connectivity protocols,” Seibald outlines.
The key benefit of Cowen’s Outsourced Trading Solution is that it can either be a high-touch, complete outsourced trading solution or can supplement an existing trading operation, depending on the client’s specific needs.
Seibald explains: “Our clients get to leverage our established and experienced team of buy-side traders, support staff, buy-side trading and reporting infrastructures. They can also make the most the existing relationships we have developed over the years with scores of institutional brokers that provide clients research, corporate access, and capital markets flows.”
The solution offers exceptional value to investment managers as it truly functions as the client’s trading desk, but avoids the cost of building and operating an in-house trading infrastructure. “Our agency-only model avoids the potential conflicts that may arise at other firms that make markets in securities or trade for their own accounts.
“In addition, because we reside in a separate broker-dealer from Cowen’s institutional business, we can comfortably assert that we have the structure in place to protect the integrity of our clients’ activities. Most importantly, our solution allows clients to concentrate their resources on alpha-generating functions, including research, portfolio construction and risk management.”
The most meaningful innovation for Cowen has been the addition of a complete foreign currency trading solution during US, Asia and EU trading hours. The 7-man team providing this service, as with the equity and derivative group, is comprised of seasoned traders in their specific area of expertise with both buy and sell side experience.
“This is a hallmark of our Outsourced Trading organisation and one that we believe facilitates the buy-side experience clients are accustomed to and appreciate. Adding FX to our repertoire brings complimentary services to our already developed client base. Importantly, it extends the reach of our offering to a more diversified and larger potential audience of more seasoned funds that tend to invest and trade across asset classes,” Seibald says.
Jack Seibald
Managing Director, Global Co-Head of Prime Brokerage and Outsourced Trading
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.
