Meet the Meraki Team: Vice President of Business Development Mary McAvey

Welcome to this episode of “Meet the Meraki Team.”

Meraki Global Advisors LLC, a leading global multi-asset outsourced trading firm, was founded with a rebellious determination to deliver truly conflict-free services to portfolio and asset managers. At Meraki Global Advisors, our team is our greatest asset, and today, we have a special guest to share his wealth of experience and expertise. Joining us is Mary McAvey, Vice President of Business Development of Meraki Global Advisors.

Mary McAvey joined Meraki after spending three years at With Intelligence as a Commercial Sales Manager. At With Intelligence, Mary managed the flagship brand HFM and after the acquisition was also responsible for heading up commercial sales for HFA. Mary began her career in the financial services industry at Enfusion, where she was a Pre-Sales and Marketing Analyst. She earned her BA in Political Science and Government from University at Albany, SUNY.

In this episode, Mary will take us through her journey and how each experience shaped her approach to helping her clients solve for pain points.

Let’s dive right in!

“I want to understand why we’re having this conversation around outsourced trading. What
are your current pain points? What is a goal that you want to achieve? How can we help
you?”

Q1: Share with us about your background and how you found yourself in the outsourced trading world?

I started my career as a pre-sales and marketing analyst at Infusion, which is a well-known order and execution management firm within the industry. Within the first two months at Enfusion, I discovered that my skill set really transferred over to sales and relationship management role. Enfusion was having me attend conferences and help with client roundtables, which is where I really thrived.

While at Enfusion, I was also attending With Intelligence conferences, which is where I got connected with their sales leadership team and eventually was asked to join With Intelligence by helping expand the U.S. commercial sales team under their hedge fund brand HFM. At HFM I was really able to grow my industry knowledge and industry network on a global scale.

Working with funds and service providers all over the globe really helped me figure out what side of the industry I could really excel in. While working at HFM, I was introduced to Benjamin Arnold, the founder and managing partner of Meraki. We actually stayed in touch for a few years, and he eventually approached me to help start the Meraki sales team in New York City.

Ben is extremely smart and passionate about outsourced trading, and once I met the team throughout the interview process, I knew Meraki was a firm I wanted to back and help grow.

Q2: What excited you most about joining Meraki?

What excited me most about joining Meraki was not only the people at the firm but also the way that they valued their clients as partners because that’s something that I value, especially as someone in the financial services world and specifically on the sales side, relationships are a huge part of this industry.

When I was flown out to Park City during my interview process, I was able to meet the team and hear the traders’ experiences, like David coming from these larger corporations and larger firms to coming to joining a smaller firm and it being more like a family. I think that the Meraki outsourced trading model is extremely unique, and that was something that the industry is looking to get to.

When outsourced trading started, it was a lot of trading equities for emerging managers and launches. But over my two years at Meraki, we’ve seen across the board from large institutional asset managers approach us, family offices, as well as those launches come to us.

Q3: Describe Meraki’s unique outsourced trading model.

There are three different types of outsourced trading models. One being the traditional agency model, the other one being introducing broker-dealer model, and the third being a pure buy-side outsourced trading model.

Meraki Global Advisors will fall under the pure buy-side outsourced trading model. We are a registered broker-dealer, but we also have a specific license from FINRA that allows us to piggyback off of our client’s capabilities and allows us to trade every single asset class in every region of the world.

Meraki is the only outsourced trading firm in the space that has a 3:1 client-to-trader ratios. A lot of our peers in the space, you’ll be working with one trader covering anywhere from 20 to 30 clients. When you sign on to be a client of Meraki, you truly do receive a global seasoned multi-asset trading desk for the cost of one.

Q4: Why outsourcing from an operational perspective?

There’s no training gap, there’s no downtime, there’s continuity. You never have to worry about a trader being on vacation, and there’s transparency with our outsourced trading firm.

Q5: Why do Meraki’s clients decide to pursue outsourced trading?

There’s a few different reasons why firms turn to outsourced trading. One of them being maybe they’re an emerging manager or a launch, and they’re looking to save money. That’s one way for people to look into outsourced trading.

Another reason may be is they may have traders based in the U.S., but they want to start trading in other regions and other markets. Whereas Meraki is a 24/6 coverage outsourced trading firm. not only do we have traders based in the U.S., but we have traders based in Hong Kong, and they cover and split European hours.

When you join as a client for Meraki, you don’t only get access to one trader, you get access to a global trading desk. That’s another reason instead of a client hiring a trader or opening up a desk in these other regions, they’re able to outsource it and know that these people have the lay of the land of the markets that they’re trading in.

Another reason may be they’re looking for a multi-asset trader and they’re looking to cut costs, you can outsource it that way.

Q6: What pain points are Meraki’s clients trying to address?

A pain point that comes to mind specifically over the past year, especially if a firm is already using an outsourced trader, is scalability. I think a lot of our competitors are really good at executing on equities, and they may not be able to execute on other asset classes, whereas, within the Meraki model, we have the capabilities of trading every asset class.

For example, fixed income comes to mind. I think that’s a hot topic, especially where the industry is at right now. We’re definitely seeing a lot of firms looking towards opening up a fixed-income fund or adding fixed income to their current strategies and with Meraki, having that capability to piggyback off of for our clients. We’ve definitely seen people coming for our expertise in that space.

Q7: How has the outsourced landscape changed?

I joined the firm in May of 2022, and what I had known about outsourced trading was really that a lot of emerging managers and hedge fund launches were looking to outsourced trading to save money, but what has proven to me over the past two years that I’ve been at the firm, is that really anyone is looking to outsource trade.

I would say when the outsourced trading world first started, it was definitely for the smaller managers but as we have seen in the past five years, we’ve seen that there’s a need for firms opening up into new markets. We’ve seen people wanting to add on certain asset classes. People who trade high frequency and maybe low volume. They wanted to utilize outsourced trading because they don’t want to hire a trader to sit behind a desk and trade once a month.

What we’re looking to see in the next year is that not only these emerging managers but also larger institutional asset managers who have maybe a trading desk of 60 people, but they may struggle with a certain region, or a certain market, or certain strategy look to outsource to senior multi-asset traders who are flocking to these outsourced trading firms.

We’re having conversations with large institutional asset managers. Our medium client size at Meraki is about $1.5 billion, which is definitely, I believe, over a billion dollars larger than a lot of our competitors in this space.

Q8: What do you think makes Meraki stand out amongst the others in the space?

I would say it’s a different sale. If we’re not selling a product, but we’re selling a partnership and a service, we’re selective about our clients. We understand that we might not be for everyone, and we don’t want to be the largest outsourced trading business in the world. We want to be the best, and I think that there’s a big testament to the work that we’ve done over the past couple of years, especially Benjamin Arnold, the founder of the firm.

He’s very hands-on with the everyday functionality of the firm, and this past year, Global Custodians released their outsourced trading survey, and Meraki scored overall a 9.54 out of 10 across a few different categories, and that was Coverage, Execution, Business Model, Operations, Post-Trade, Client Services, and Onboarding.

Over the survey, there was an overwhelming amount of responses from our clients, which was amazing. They even made a note that we received one of the highest amounts of client responses across the board, across our peers, which was really exciting, and then a few months after the outsourced trading handbook was released, we actually received the Industry Leader award in Outsourced Trading for Coverage and Execution. I think that it is a big testament to Benjamin Arnold for sticking true with the pure buy-side outsourced trading model.

One thing that really excites me and excites our clients and prospects is that we have a 3:1 client-to-trader ratio, which allows our traders to only work with three funds where maybe some others in the space, you may have one trader covering any words of 20 to 30 clients, So when you work with Meraki, you really are getting a hands-on trader covering you at a global scale.

Q9: What has helped you succeed in your role as VP of Business Development at Meraki Global Advisors?

Listening is just as important as talking while speaking with a potential client. I want to understand why we’re having this conversation around outsourced trading. What are your current pain points? What is a goal that you want to achieve? How can we help you? I want to hear the start of your firm and what has gotten you to the point to reach out to an outsourced trading firm.

So listening, I would say is probably the best advice I can give to a salesperson and that’s kind of helped me succeed in the role because I want to understand why we’re having that conversation.

Sitting down with the traders any chance I get is definitely something that helps me succeed in this role. Even if it’s just analyzing a report that they’ve created for a client. That way, I can understand what the report is so when I’m speaking with a potential client, I can understand what they will need out of an outsourced trader.


About Meraki Global Advisors

Meraki Global Advisors was founded with a rebellious determination to deliver truly conflict-free services to asset managers. Headquartered in Park City, Utah with offices in New York and Hong Kong, Meraki provides outsourced global multi-asset trading, leverage management, and capital introduction services to the asset management industry. Meraki Global Advisors LLC is a FINRA member and SEC Registered. 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

Meet the Meraki Team: Head of APAC Trading Simon Kelt

Welcome to this episode of “Meet the Meraki Team.”

Meraki Global Advisors LLC, a leading global multi-asset outsourced trading firm, was founded with a rebellious determination to deliver truly conflict-free services to portfolio and asset managers. At Meraki Global Advisors, our team is our greatest asset, and today, we have a special guest to share his wealth of experience and expertise. Joining us is Mr. Simon Kelt, Head of APAC Trading of Meraki Global Advisors.

Simon Kelt has over 17 years of experience trading global markets in both Europe and Asia. He spent the last 12 years in Asia across Hong Kong and India, most recently at HSBC trading Asian equities with a focus on greater China market coverage where he helped develop and build out the business. Simon began his career in London on the JP Morgan equity swaps desk before becoming a European equities trader for Libertas Capital. He received a BCom from The University of Otago New Zealand in Finance and Economics with a postgraduate in Finance.

In this episode, Simon will take us through his journey, sharing valuable lessons learned and how each experience shaped his approach to trading and risk management.

Let’s dive right in!

“Managing a portfolio from outside the region can be a challenge, and trying to navigate the various market intricacies and structures includes risk that can be costly. We want to be an extension of our client’s desk – to be their eyes and ears where possible.”

Q1: What motivated you to pursue the opportunity in outsourced trading and led you to Meraki?

I’ve seen outsourced trading really grow in stature in recent years, and it’s been increasingly becoming a good solution for asset managers; it was well-established in the US and Europe but much less so in Asia. It always made a lot of sense to me as a good solution, particularly for asset managers who don’t have offices in the region or those who don’t have the capacity to have a full-time trader. So they can either supplement their trading or hand it over completely to devote resources to their core business and elsewhere.

I have known Ben Arnold, who set up the firm, for about 10 to 12 years. We originally crossed paths in India, where we both worked at investment banks in Mumbai, India. I subsequently covered him for a number of years when he worked for another outsourced trading business before setting up Meraki. So, when he set up the firm, it was his desire to create and offer a non-conflicted service. It seemed to him to be the most logical way to create a best-of-breed solution versus a lot of the other offerings on the street and how they operated. From the beginning, I have seen firsthand how Meraki operates and how it was received by clients and brokers as well.

In many ways, I guess I had a front-row seat to what worked best for firms seeking to outsource their trading and how this model resonated with clients across the marketplace. Ben asked me to help set up the HK office in 2020, and I really felt it was the best platform offering to clients in a space that seemed to be growing rapidly.

Q2: Tell us about your career experience and how it provides a strong base for your current role

I’m originally from New Zealand. I started my career up in London at J.P. Morgan and, after about five years trading mostly European equities, moved to Hong Kong, where I’ve been based for the most part since 2009. Basically, I’ve been mainly trading regional markets during this time, including a stint based in India for a couple of years, trading Indian equities. This is where I got some proper emerging market trading exposure, an on-ground level experience, which was certainly very valuable in understanding how these markets worked in practice.

During this time, I was able to gain experience in mostly Asian and European markets and all their complexities, market structures, and characteristics, which allowed me to have a wide knowledge base for what we do at Meraki when we trade from Hong Kong and also the early market trading session in Europe. Having a wide network of brokers and contacts across the region is certainly a very important part of the business and in achieving positive trading experiences for our Meraki clients.

Q3: What is your view on the opportunity for the Outsourced Trading space over the next 3-5 years in the Asia Pacific?

The last four years have seen some prolific growth in outsourced trading globally. There was a recent study done by Ergo, an external consultant, and they estimated that the number of firms offering the service globally is in excess of 40, up from around 10, five years ago. In a broad sense, I suppose outsourced trading and its perception have certainly changed by both investors and brokers.

On a relative basis, outsourced trading is still in its infancy in Asia compared to the U.S. and Europe. There’s really only a handful of firms in Asia offering this service so I see this business increasing in size and scope as it becomes more mainstream and as interest levels climb from buy-side institutions. We have seen some banks also launch outsourced trading businesses and have offices in the Asian region, and they’re starting to prosper and grow. We have seen the profile for this business continue to build.

We see interest from hedge funds, family offices, and traditional asset managers, all of which have different requirements, issues, and trading parameters. I certainly feel those who are providing a comprehensive outsourced trading service and a differentiated model according to clients’ needs should outperform the existing options for these outsourced trading solutions.

Q4: With the Asia live coverage desk up and running, what advantages have you been able to provide clients based outside the region?

Managing a marketable securities portfolio from outside the region can be a challenge, and trying to navigate the various market intricacies and structures inherently carries risk, and that risk can be costly at times if not managed properly. We at Meraki can work to achieve and become our clients’ desk, – to be their eyes and ears on the local marketplace ground and be able to perform as their internal trader.

Meraki advises and guides our clients on hedging solutions, keeping them abreast of local news and items not reported on Bloomberg immediately. We work to try to ascertain what’s been happening and make a portfolio manager aware even after hours if a market sector or stock is moving so that they can make decisions accordingly. We believe this can work to mitigate their risk and help them generate their alpha. Managing orders live and giving our clients the attention they need is servicing what a client needs to do.

Q5: For managers based in the Asia region, what are ways to add more alpha and performance to the fund?

Being based in Hong Kong, there’s still a lot to consider with and on behalf of our fund managers. Meraki is a resource for insight around (1) risk events, whether they be macro or stock specific, (2) understanding levels of significance for a position relative to the portfolio, (3) how a position may be impacted by something else in the region that is correlated and moving, (4) if there’s perhaps a liquidity event and giving the PM a look at that which they may perhaps not have gotten, or (5) things like running EQS screens to understand when portfolio names are overbought or oversold based on a range of different metrics.

We’re trying to highlight when they might want to adjust a position and also when things like doing some work around the borrow profile of a stock and how that may be changing and meaningful for a stock position. So all of these things we obviously try to help with, but then primarily really trying to act as a middle person to increase and enhance the fluidity of information to try and ensure what’s meaningful, what’s price sensitive is highlighted and therefore managers can make the best decision.

Q6: Taking a step further, a key edge of Meraki is its unrivaled trading experience in Asian emerging markets. With India getting a lot more focus in recent months and the recent change to T+1 as an example, how is Meraki positioned to offer the best solutions to its clients for these unique situations?

I’ve been fortunate to have lived and worked in India, and it’s certainly a very unique market that is continually evolving and can be a challenge to navigate as the industry switches to T+1. This has not been without its issues for our foreign-based clients. Given the operational challenge it presents, Meraki can help clients navigate this process.

Meraki is a direct contact between the client and the broker or the custodian, and for those that have difficulty trying to staff those local trading hours. It’s sort of 6:00 a.m. – 6:30 a.m. Meraki can assist and ease this transition and settlement process for our clients.


About Meraki Global Advisors

Meraki Global Advisors was founded with a rebellious determination to deliver truly conflict-free services to asset managers. Headquartered in Park City, Utah with offices in New York and Hong Kong, Meraki provides outsourced global multi-asset trading, leverage management, and capital introduction services to the asset management industry. Meraki Global Advisors LLC is a FINRA member and SEC Registered. 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

Meet the Meraki Team: Senior Business Strategist Tom O’Leary

Welcome to this episode of “Meet the Meraki Team.”

Meraki Global Advisors LLC, a leading global multi-asset outsourced trading firm, was founded with a rebellious determination to deliver truly conflict-free services to asset managers. At Meraki Global Advisors, our team is our greatest asset, and today, we have a special guest to share his wealth of experience and expertise.

Joining us is Tom O’Leary, Senior Business Strategist of Meraki Global Advisors. Tom brings nearly 35 years of extensive industry experience in strategic planning and business development, leading high performing teams, and integrating information technology for improving processes at companies building and scaling their capital markets business infrastructure. He joins Meraki from HSBC Global Banking and Markets, where he served as Managing Director and Head of Equities for the Americas focusing on managing the equities business across the globe, and a member of the Global Equity Executive Committee. Prior to HSBC, O’Leary was a Senior Managing Director with Bear Stearns in a variety of leadership positions, including Co-Head of the Global Equity Sales Division and Head of International Equities.

In this episode, Tom O’Leary will take us through his journey, sharing valuable lessons learned and how each experience shaped his approach to trading and risk management. This promises to be a captivating conversation with a true industry expert.

“Look, we’re not for everyone. Everybody’s not going to want to do outsourced trading and everybody’s not going to want to do outsourced trading exactly the way that we do it. But Ben Arnold, the founder of the firm decided this is the way we’re going to do it, and I think it’s the purest form of outsourced trading. And this is what we do. It’s the only thing we do. And it’s the only way we do it.”

Let’s dive right in!

Q1: Walk through your history and what roles you have filled over your career?

It’s been a long career. I’ve got nearly35 years of experience in the industry, but really with two long stretches…the first one being at Bear Stearns for 14 years, where I held numerous positions, and the second one being at HSBC for 11 years, where for all 11 years I was Head of Equities in the Americas. But, at Bear Stearns, I started on the Latin American desk as a salesperson. I held numerous positions, one of them was Head of Research for Latin America. I also rose to be the Head of International Equities, and eventually, right before JP Morgan took Bear Stearns over, I was Co-Head of Sales for Equities across the entire equity business.

Q2: What excited you about joining Meraki and outsourced trading?

It really was the quality of the people at Meraki. And even though we’re a relatively small firm, it’s unique in the fact that so many people at the firm have known each other from the industry for many years. Even a couple have worked together earlier in their career. But it’s really the quality of the people, and the quality of the product is the traders. The traders have a wealth of experience from the buy-side that they bring to the table. That was really appealing to me when we are going to be marketing this service and growing this business through a client service business. These guys are actually the product, so they’re what’s important. It’s their experience and the unique services offered that we really sell.

Q3: How has the landscape changed and grown since your time at HSBC?

Probably not so much as change, but certainly things continue to move at an accelerated pace. We mentioned one of the trends in the industry that I think is really driving a lot of key decisions is the cost pressures that both the buy and the sell-side are facing. And those are significant. Those started 10 or 15 years ago, and every time you feel like they’re done, they continue to accelerate.

When those cost pressures come on the sell-side, you immediately look to headcount to reduce because you usually have vast teams where you can make those reductions. For asset management, those decisions are even a little bit more challenging. They’ve got to make key decisions like-

Do I add another trader?
Or do I add another analyst?
Do I add another portfolio manager?
Are we going to be looking at a different region?

…So, those cost pressures are real. Also, the rate of change on the technological rates of change continues to be significant for the business. These are two major mega-trends that I just don’t see slowing down whatsoever.

Q4: What precipitated the growth opportunity in the space?

I believe it’s these two trends that we’ve already discussed that contributed to the growth of outsource trading. Again, the cost pressure on asset management, and the other one is the acceleration of the work from home, or work from anywhere really, if we can call it that! I think that took an industry, this industry in particular, which has certainly existed for a number of years, but accelerated that probably forward 10 or 15 or 20 years because portfolio managers and analysts couldn’t fathom not being right down the hall or right across the desk from the trading counterparts, but then everybody learned to live without anybody when everybody was working from home. So I think those two big trends are going to continue.

Q5: Tell us about your global exposure and experience.

Most of my almost 35 years have been spent, I would say, on the international markets. And by that, I mean I’ve been focusing on markets that are located outside the United States. At Bear Stearns, as I mentioned, I started in sales on the LATAM desk, then Head of Research for LATAM, and then the Head of International Equities. And, with my partners at Bear Stearns, we had a fairly extensive expansion program going on within the equity business. I spent a number of years building out our businesses with my partners in Europe and my partners in Asia. So I traveled extensively to all those markets, probably more than my wife and my kids wanted me to be gone, but I was traveling upwards of 120-130 days a year all across the globe.

Also, with my experience at HSBC, the entire business plan at HSBC was built around the global nature of the business. Our expertise was bringing what we knew about the Asian markets, what we knew about Europe, and what we knew about emerging markets into the U.S. investment community, those that were investing outside the United States. We weren’t trying to compete with the Morgan Stanley’s, the Goldman Sachs’, or the JP Morgan’s with their U.S. equity product. We were trying to compete with what we knew from all the other international markets around the world and bringing that into the U.S. investment base.

Q6: What was the most interesting or powerful insight you learned in your career?

I’d have to say that the success in any service business is ultimately determined by your clients. It’s their trust in you and it’s their trust in your firm that ultimately determines what type of relationship you have with them. Trust is something that takes a very long time to build. But then again, you can lose it in an instant. I think you have to be very focused on doing things daily, day-in and day-out, trade by trade, making sure that you’re very focused on what this does to the long term relationship that you have with your clients.

Q7: How do you view the opportunity in the outsourced trading space over the next 3-5 years?

I’m pretty bullish on the outsourced trading space and probably the most bullish in the firm because I do believe that some of these trends that we’ve already discussed, the cost pressures and the work from anywhere culture, are things that continue to drive the business. Also, the rationalization of resources that the asset management industry is going to have to make. I think that outsourced trading makes a lot of sense and can be a natural solution for some of these challenges.

Q8: Can you speak to some of the similarities in the competitive environment of outsourced trading firms and that of what you saw over your career in traditional brokerage firms?

Certainly, client service and relationships are our key drivers to the success in both of these businesses. And specifically for trading, it’s the use of technology and how technology continues to evolve within the capital market space. But most important, I think it’s combining these two with the experiences of the traders and what the traders individually can help you do to navigate, which is already an increasingly complex environment.

Q9: What are your potential clients most concerned about, and what and how is Meraki addressing that for them?

The cost pressures are definitely the primary consideration. They may be looking at expanding into different regions of the world, and you may be able to have two or three traders for the U.S., but when you’re looking at running a 24 hour trading desk… that can get quite expensive when you talk about compliance when you talk about technology, and when you talk about personnel. I think that’s one of the reasons that they start to begin to look at outsourcing. And they’ve done that with all their other businesses- they’ve done it with compliance, they’ve done it with accounting, and things like that. I think this is just a natural extension of this.

One of the other concerns that I know that most of the people taking a look at whether or not to do this- is confidentiality. How they believe they can receive it, this outsourced trading service and still have everything that they’re doing proprietary to them and their trades proprietary to them. So I think the Meraki model fits in perfectly with that. We are more your partner. We are your licensed trader. We are not connected. We are not your custodian. We are not your prime broker. We are there solely to perform a pure buy-side trading service. And at the end of the day, you as the client, still face-off with all your counterparties across the street, and we are just there to provide you with that service.

Look, we’re not for everyone. Everybody’s not going to want to do outsourced trading, and everybody’s not going to want to do outsourced trading exactly the way that we do it. But Ben Arnold, the founder of the firm, decided this is the way we’re going to do it, and I think it’s the purest form of outsourced trading. And this is what we do. It’s the only thing we do. And it’s the only way we do it.

Q10: Why do you think Meraki ranks so high on the TRADE’s inaugural Outsourced Trading survey, garnering a 9.54 score and outperforming on the two most critical components of an outsourced trading service provider – Coverage and Execution (earning standout scores of 9.75 and 9.81, respectively)?

That’s directly related to the quality and the experience of the traders that we have on the desk. Most have over 20 years experience in some very large firms. They all have a tremendous amount of experience; they’ve seen a lot of things develop in the capital markets, they have the expertise on technology, they’re very talented deciding which way those orders should be treated because it’s not plain vanilla, it’s very complicated, and that’s the skill set that they bring to the table.


About Meraki Global Advisors

Meraki Global Advisors was founded with a rebellious determination to deliver truly conflict-free services to asset managers. Headquartered in Park City, Utah with offices in New York and Hong Kong, Meraki provides outsourced global multi-asset trading, leverage management, and capital introduction services to the asset management industry. Meraki Global Advisors LLC is a FINRA member and SEC Registered. 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

Redefining Global Multi-Asset Outsourced Trading Services with Ben Arnold of Meraki Global Advisors

We are thrilled to be featured on PrimeAlpha’s Alternatives Visionaries & Innovators Podcast Series

Benjamin Arnold is the Founder and Managing Partner of Meraki Global Advisors, a buy-side solution that provides global multi-asset trading, leverage management, and capital introduction services to sophisticated and diversified clients. With an independent and unconflicted approach, Meraki helps partners manage complex strategies and asset classes across the globe.

“In my career journey, I took a unique path that led me through various roles in the finance industry. After starting at UBS Private Wealth Management, I realized I was more interested in institutional trading. Following my interest, I moved to London and interned at a firm teaching finance courses to investment bank employees. I learned about complex financial instruments and decided to pursue trading. I joined a Tiger spinout and then moved to Asian Century Quest, trading Asian equities from New York. I eventually realized I needed to be in Asia and moved to Hong Kong with my wife’s support.

After exploring different options, I ventured into sell-side trading and received multiple job offers. I chose India, where I worked at BNP Paribas and later Goldman Sachs, covering large institutions and trading various asset classes. Eventually, we returned to the US, and I founded Meraki Global Advisors, an outsourced trading firm. We started small and thoughtfully grew the business globally with offices in Park City and Hong Kong.

Our approach is different. We tailor our trading services to each client’s unique needs, fitting into their workflow instead of imposing a standardized model. We focus on bespoke solutions, supporting various asset classes and regions, and working closely with clients to provide expert trading insights. Our goal is ensuring clients have the support they need around the clock.

Looking ahead, we plan to expand our services further, including obtaining licenses for London and exploring opportunities in credit markets, crypto, and capital introduction. We’re dedicated to serving our clients’ needs and maintaining our commitment to providing trading solutions.”

Meet the Meraki Outsourced Trading Team, Trader David Laub

Welcome to this episode of “Meet the Meraki Team.”

Meraki Global Advisors, a leading global multi-asset outsourced trading firm, was founded with a rebellious determination to deliver truly conflict-free services to asset managers. At Meraki Global Advisors, our team is our greatest asset, and today, we have a special guest to share his wealth of experience and expertise.

Joining us is David Laub, a seasoned trading professional with an impressive background in the investment industry. David has led trading desks and overseen various trading functions, gaining invaluable insights from both large platform funds and smaller organizations.

In this episode, David will take us through his journey, sharing valuable lessons learned and how each experience shaped his approach to trading and risk management. This promises to be a captivating conversation with a true industry expert.

“Every PM has their own mosaic about how they think of things. The best PMs are unbiased about whether they believe a stock is a long or a short; the mosaic tells them which it is. So, if we can help add a few pieces to that mosaic, then maybe we are doing our job.”

Let’s dive right in!

Q1: Walk through your history on the buyside and what roles have you filled over your career leading you to the path of outsourced trading?

I started at Hunter Global Investors, a Tiger Cub spin-out, overseeing the trading desk and other trading functions. I went to work for the individual that oversaw the financial space for an original Tiger Cub. After Hunter Global I joined a large platform fund and was there for just under 4 years.

A great benefit to being at a platform fund is that it really teaches you to be able to look at things on a relative basis. You had to be sharp because your portfolio managers were very diligent. Most platforms only allow for portfolio managers to traffic in one sector, so they become incredibly adept with all the names. For instance, some PM’s only traded tech, and others that only traded consumer, industrials, etc. but all had very tight net and gross limits that they were allowed to position around. That substantially limited them to what actions they could take, so you had to really be on top of your game as far as understanding the differences between every name in their space. So, in a way, that was my boot camp for understanding the relative world.

I was lucky enough to be approached by a gentleman leaving a macro focused firm 3+ years into the platform experience who wanted to start his own fund and offered me the opportunity to head trading there. I was with that fund for about three years. Unfortunately, the fund ran into some performance issues. It was a very good lesson in observing how portfolio managers manage risk from two different points of view, how to navigate the market itself but also how to navigate explaining their actions to investors.

All my experiences culminated in my education for how I try and help portfolio managers make sure that they’re seeing as much as possible while trying to navigate those 2 different risk points on their individual compasses.

Q2: What excited you about joining Meraki Global Advisors and outsourced trading?

It was a two-stage approach. First, I did not want to be tied to just any one manager’s performance. It can be something that is largely out of any trader’s control. You can be working with an excellent portfolio manager, who happens to be a wonderful person on top of being incredibly diligent, but there are simply unforeseen risks out there that nobody will see coming. I wanted to work to alleviate that risk. Outsourced trading was one of the best ways to do that. So, then it became a matter of doing my homework on outsourced trading.

I have good friends that are in the business. I was privy to a fair amount of information about how it worked, where people had strengths and weaknesses. When I came across Meraki, I liked the strength this firm has demonstrated internationally. The two founding members have spent significant time internationally, which I thought is a competitive advantage.

Q3: With that diverse skill set, tell us what areas of the market or the hedge fund trading landscape you focus on now.

It depends on the portfolio manager that you’re working for. Where we find one can add the most value is this: if the portfolio manager is not keen to focus on risk metrics, we will try to add that to their perspective by monitoring and highlighting those we think may be impacting the portfolio. For instance, if you get a good fundamental bottom-up stock picker, and the PM knows the five or six names they really like but are exposed in just two sectors, are they aware of their concentration risk? If they are limited on sector risk by their mandate, then they will be, but if not, will their investors allow for this? We are keeping an eye on those things so that they don’t get to the point where their exposure is too concentrated, especially for sophisticated investors.

Now if we are trading for someone that is coming from a well-known platform, then they are already focused on that. We find that people from platforms are much more focused on what others are thinking about their space. Most of the platform spin outs are exposed to multiple risk factors that control their optionality in whatever sector they are trading. They get it on managing their risk.

A large majority of the PMs are talented enough to have succeeded to such a level that they are now able to open their own shop. They know their names as well as any on a fundamental basis, so many look for an edge. That edge seems to reside somewhere between trading flow and game theory. The structure of the platforms comes into play here. If there are 4 or 5 large platforms that all have at least 3 or 4 portfolio managers in each sector, the total number of pods trading the same space can easily reach 15 or 20. If each pod has an AUM roughly around $500M, then that quickly adds up to multiple billions watching and trading a sector with itchy trigger fingers.

These PM’s would like to know what will make the others in the space take action. What is enough to force others to trade and then be able to take that same action just before whatever catalyst that is the game theory thesis. This concept makes them much more sensitive to what the chatter is around each and every name, what other investors are saying around those names and the flows in each name that follow. So, of the 20 people trading one name, it’s ok to be the 3rd, 4th, or 5th to take the same action, but being 18th or 19th would be costly if the name is overtly consensus.

So, the answer to the focus depends on whether it is more of a fundamentally focused portfolio manager or a platform-oriented one that’s already been exposed to the circus.

Q4: How do you differentiate yourself with your buy-side background relative to others?

This can be a nuanced question from the standpoint that there are lots of very good people out there. I worked with plenty of very talented people at a platform, but I got the subjective feeling that so many were focusing on the minute relative differences of their sectors. Since they are surrounded by magnificent risk departments, they have no reason to take a step back and try to see things through a more holistic lens.

One of the ways that I try to differentiate is to make sure that I can add value to a portfolio manager that might need it, in places where they might have blind spots. Every PM is different; they all have their own methodology and the way they approach things. I have been fortunate enough to have traded for a lot of different styles of portfolio management. If I can identify a stylistic tendency that often generates a blind spot, I can then try and fill that blind spot. Some will accept it, some may value it, and others could think it’s worthless. But I have found that going through the pattern recognition exercise, whether they find value or not, still gives me the opportunity to mention something that may help with their mosaic. They may not see the value that I do, but one has to try.

Q5: As an outsourced trader, how do you view risk, both at the stock level and the portfolio level?

We try and help portfolio managers focus on the metrics we are familiar with. It’s not for us to opine on risks related to the fundamentals, that is the domain of portfolio managers and analysts. What we can try and bring to light is overextended names in the portfolio and or names we think demonstrate crowdedness.

When portfolio transparency is available from the client, we can rank the portfolio through a few different metrics. None of these metrics in and of themselves can offer the answer as to whether a name is overextended, but together they can help offer a view as if they may be.

We start by ranking the relative strength index of each name. It is not always the case but names with RSI’s over 70 or below 30 are often thought to be over extended. We also like to look at what the option market is telling us. If the implied volatility is substantially higher than the historic volatility, are we aware of why? Is there a forthcoming binary catalyst? If so, is the portfolio manager comfortable with the potential negative outcome? So, we rank the difference between the implied and historic volatilities of each name in order to try and spot any outliers. Finally, we monitor the alpha and beta contributions to overall performance. If a particular name has an unusually large contribution of alpha, could that mean that the market is overly confident in the name presently, and if expectations are not met is it susceptible to a reversion?

All 3 of these metrics can help us alert portfolio managers if each of them is leaning a certain way. A name with unusually high RSI, low implied vol and extreme alpha contribution headed into a quarterly earnings report should have a very good result. But, if the name were to miss it would be at risk, much more so than a name without the 3 metrics ranked as highly. On the flip side, and this is where we have found this exercise to be even more valuable, is when the set up is around consensus short names. If the RSI ranks very low, the performance contribution is highly driven by beta or nonexistent alpha, and implied vol is very low, it could become a recipe for an upside surprise. If in fact the name is a consensus short, it becomes a very dangerous candidate for a short squeeze.

Portfolio risk is something we can look at, but that is largely the domain of each individual portfolio manager. Given full transparency we will always monitor sector, geographical and factor risk, but it has been our experience that most PM’s are fully aware of these metrics from day one of their launch. As we mentioned from the beginning, we are simply trying to offer a view to our clients that they normally might not have in their focus.

Q6: When you speak with a fund with a trading-focused portfolio manager, how might you engage?

A lot of younger portfolio managers and those with large platform experience are very informed in trading. They may have much shorter holding periods in mind, which makes any pertinent information related to their names even more impactful in the short term. A few ways we can try to help add value are: (1) keeping them abreast of all order flows that could impact their names either directly or indirectly. (2) offer anything that’s tertiary, anything that feels like it offers them an edge. (3) Once in a while, remind them that fundamentals can matter, especially when many are so focused on every little screen movement. For the most part, the trading-oriented PMs know what they want to do; all you can do is try and add as much color as possible.

Q7: On the flip side, if a fund is looking for less noise on the trading front but more core competencies from you, how do you tailor the information you push through to them?

Tread lightly. One does not need to be an all-star when trading things for them, especially if a PM sends an order with instructions to trade it as you see fit. You need to slowly figure out what their time sensitivity is and how their vocabulary works. Traders and portfolio managers sometimes have different vocabularies, and it’s very important to start and be extra careful when you are first learning the tendencies of new portfolio managers. From there, we try and introduce different things to see what resonates at a slow pace. This is where the metric rankings and a few other things that we do for portfolio managers come into play. If any of it resonates, we will continue to do it. If it does not, we simply block and tackle the best we can.


About Meraki Global Advisors

Meraki Global Advisors was founded with a rebellious determination to deliver truly conflict-free services to asset managers. Headquartered in Park City, Utah with offices in New York and Hong Kong, Meraki provides outsourced global multi-asset trading, leverage management, and capital introduction services to the asset management industry. Meraki Global Advisors LLC is a FINRA member and SEC Registered. 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

Webinar Replay: Achieving Greater Trading Efficiency with Ben Arnold, Founder & Managing Partner of Meraki Global Advisors

Ben Arnold, Founder & Managing Partner at Meraki Global Advisors, joined the Achieving Greater Trading Efficiency webinar on Tuesday, October 12, 2021, presented by ISS LiquidMetrix. Watch the replay as he discusses a wide variety of tools outsourced trading desks use to improve performance and reduce trading costs. 

Topics included:

  • How you can work with an outsourced trading desk to create a tailored solution to your trading needs and investment strategy
  • Leveraging the resources of outsourced trading desks to enhance the best execution

Watch The Live Replay


About Meraki Global Advisors

Meraki Global Advisors was founded with a rebellious determination to deliver truly conflict-free services to asset managers. Headquartered in Park City, Utah with offices in New York and Hong Kong, Meraki provides outsourced global multi-asset trading, leverage management, and capital introduction services to the asset management industry. Meraki Global Advisors LLC is a FINRA member and SEC Registered. 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

Navigating Rough Waters: Current Insights to Managing Risk Across Emerging Markets – Webinar Replay

Ben Arnold, Founder & Managing Partner of Meraki Global Advisors, joined a live panel webinar presented by SGX considering topics such as the macroeconomic trends in emerging markets, the regulatory landscape in China’s rapidly developing tech policy and the varying success that emerging markets economies have had in combating COVID-19.

Watch the Live Replay


About Meraki Global Advisors

Meraki Global Advisors was founded with a rebellious determination to deliver truly conflict-free services to asset managers. Headquartered in Park City, Utah with offices in New York and Hong Kong, Meraki provides outsourced global multi-asset trading, leverage management, and capital introduction services to the asset management industry. Meraki Global Advisors LLC is a FINRA member and SEC Registered. 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

Hedge Fund Association & Meraki Global Advisors Webinar: Traditional Hedge Funds & Crypto

Many investors have Bitcoin, Ethereum and even Dogecoin on the brain, but how are hedge funds actually trading crypto? Watch the replay as Benjamin R Arnold, Founder & CEO, Meraki Global Advisors moderates this informative and timely webinar.

Download PDF Here

Featured Speakers:
Kevin Kang, CFA, Founding Principal, BKCoin Capital
Greg Bunn, Chief Strategy Officer, CrossTower
Jason Urban, Co-Head of Trading, Galaxy Digital


About Meraki Global Advisors

Meraki Global Advisors was founded with a rebellious determination to deliver truly conflict-free services to asset managers. Headquartered in Park City, Utah with offices in New York and Hong Kong, Meraki provides outsourced global multi-asset trading, leverage management, and capital introduction services to the asset management industry. Meraki Global Advisors LLC is a FINRA member and SEC Registered. 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

Video/Podcast Pierpoint Perspective – Outsourced Trading with Ben Arnold

Benjamin Arnold, Founder & CEO of Meraki Global Advisors, joined the Pierpoint Perspectives Podcast to discuss outsourced trading.

Listen to the podcast below:

Video/Podcast – Outsourced Trading with Ben Arnold


About Meraki Global Advisors

Meraki Global Advisors was founded with a rebellious determination to deliver truly conflict-free services to asset managers. Headquartered in Park City, Utah with offices in New York and Hong Kong, Meraki provides outsourced global multi-asset trading, leverage management, and capital introduction services to the asset management industry. Meraki Global Advisors LLC is a FINRA member and SEC Registered. 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

Structured Credit Investor (SCI) Interview with Ben Arnold of Meraki Global Advisors on Conflict-free Outsourced Trading

Benjamin Arnold, Founding Partner and CEO of Meraki Global Advisors answers SCI’s questions.

Read More Here

Website Link


About Meraki Global Advisors

Meraki Global Advisors was founded with a rebellious determination to deliver truly conflict-free services to asset managers. Headquartered in Park City, Utah with offices in New York and Hong Kong, Meraki provides outsourced global multi-asset trading, leverage management, and capital introduction services to the asset management industry. Meraki Global Advisors LLC is a FINRA member and SEC Registered. 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