In the Driver’s Seat: How Hedge Funds Can Leverage Outsourced Trading Without Losing Control
Hedge fund managers no longer must choose between cost efficiency and control. The In the Driver’s Seat whitepaper provides a detailed, data-driven breakdown of how hedge funds can navigate outsourced trading while maintaining complete control over their operation.
Download the full whitepaper now to discover how top hedge funds are optimizing their trading operations without compromise.
The Balance Between Efficiency and Control in Trading Operations
For hedge funds, trading is more than just executing buy and sell orders—it’s a critical function that directly impacts alpha generation, risk management, and investor confidence. Yet, as the industry evolves, many fund managers face a difficult decision: should they maintain and grow an in-house trading desk with its fixed costs and operational complexities, or is it time to explore outsourced trading services?
The concern many hedge funds express is losing control over trading when outsourcing. To address this, our latest whitepaper, In the Driver’s Seat, shows that this does not have to be the case. With the right outsourced trading model and the right partner, hedge funds can retain full control while improving performance, optimizing costs, and expanding their market reach.
What’s at Stake? The Need for Control in Trading
Hedge funds thrive on control over every aspect of their organization. This includes their investment strategy, managing portfolio risk, and trading. A misstep in any of these areas can lead to suboptimal performance. More importantly, large institutional investors expect fund managers to demonstrate institutional-grade infrastructure, including robust trading capabilities. Finally, hedge funds place a lot of value on having a close and direct connection to their traders, favoring traders who fully understand their strategy, can bring ideas to the table, and are always available.
The challenge? Building and maintaining an internal trading desk is costly. Finding, hiring, and integrating experienced traders into their team and culture all require significant investments of time and money. However, a new model of outsourced trading aims to deliver all the benefits of OT without the drawback of losing control.
Outsourced Trading Without Sacrificing Control
The whitepaper explores an evolved OT model, Integrated Trade Management model, which allows hedge funds to retain all the benefits of an internal desk while leveraging the expertise and infrastructure of an external trading partner. Unlike traditional broker-dealer models, this approach offers:
- Custom trading strategies tailored to the fund’s investment style
- Global multi-asset trading strategy, ensuring access to offshore markets and specialized instruments
- Direct relationships with prime brokers and liquidity providers, eliminating conflicts of interest
- A low client-to-trader ratio, ensuring high-touch service and real-time communication
By shifting from a fixed-cost structure to a variable-cost model, funds can scale their trading operations without the burden of maintaining a full in-house team.
Common Myths About Outsourced Trading
Many hedge fund managers hesitate to outsource their trading due to concerns that:
- They will be forced to trade through the outsourced firm’s brokerage partners, leading to conflicts of interest
- They will lose access to their preferred venues and liquidity pools
- They won’t have the same level of control over trade timing and strategy alignment
Our recent whitepaper In the Driver’s Seat whitepaper debunks these myths, showing that a transparent, high-touch outsourced trading partner functions as an extension of the fund’s internal operations, rather than as a detached trading service provider.
Who Benefits Most from Integrated Trade Management?
The funds that stand to gain the most from this model are those that:
- Want to expand into international markets but lack 24-hour trading coverage
- Need access to exotic instruments and bespoke hedging strategies
- Operate with lean internal teams but require institutional-grade trading
- Seek to optimize operational costs while maintaining best practices
For hedge funds looking to compete in an increasingly complex trading environment, integrated trade management provides a scalable, compliant, and alpha-preserving solution.
Download the full whitepaper now to discover how top hedge funds are optimizing their trading operations without compromise.
About Meraki Global Advisors
Meraki Global Advisors is a leading outsourced trading firm that eliminates investment managers’ implicit and explicit deadweight loss resulting from inefficient trading desk architectures. With locations in Park City, UT and Hong Kong, Meraki’s best-in-class traders provide conflict-free 24×6 global trading in every asset class, region, and country to hedge funds and asset managers of all sizes. Meraki Global Advisors LLC is a FINRA member and SEC Registered and Meraki Global Advisors (HK) Ltd is licensed and regulated by the Securities & Futures Commission of Hong Kong.
For more information, visit the Meraki Global Advisors website and LinkedIn page
Contact:
Mary McAvey
VP of Business Development
(646) 666-7041
mm@mga-us.com
