Debunking the Top Five Myths About Outsourced Trading

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The Myths, Their Origin & Persistence

Over the past decade, outsourced trading (OT) has evolved from a niche offering to a transformative solution for hedge funds and investment managers. Outsourced trading helps firms gain access to specialized trading talent, navigate illiquid markets and new geographies, and convert fixed costs into scalable variable expenses. For investment managers looking to scale, OT provides a compelling alternative to traditional in-house trading desks. Yet, despite its clear benefits and growing adoption, misconceptions about OT persist. While these misunderstandings were rooted in limitations of traditional outsourced trading providers, some newer OT models offer tailored, sophisticated, and conflict-free value-added services that challenge prior assumptions. Addressing these myths is essential to unlocking the full potential of modern OT and enabling investment firms to embrace efficiency without sacrificing control.

In this article, we’ll tackle five of the most common myths about outsourced trading, drawing on our experience working with a diverse range of investment firms and hedge fund managers. It is important to note that not all OT models are created equal. At Meraki, we’ve pioneered a unique approach to OT called Integrated Trade Management (ITM). This outsourced trading solution is different from classical OT approaches: a conflict-free, transparent, and client-centric model that helps firms optimize their trading process through a partner that’s aligned with their interests. ITM provides clients sophisticated traders who think conceptually and provide valuable feedback. While some myths are true of the classical OT models, they no longer hold with ITM.

Let’s get on with our myth busting.

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Myth 1: Outsourced Trading is Only for Small or Emerging Managers

One of the most common misconceptions about outsourced trading is that it works only for small or emerging managers who lack the resources to build in-house trading desks. While this may have been true in the early days of OT, the model has matured to meet the needs of larger, well-established investment managers. It is no longer just suitable for small funds. Firms managing $500M to over $20B in assets now rely on OT to expand their global market reach efficiently and effectively while accessing specialized expertise with different asset classes that they may lack internally. OT has become a strategic tool for mid-sized managers looking to improve competency trading certain markets without giving up control of their book. It also helps larger managers scale and add geographical exposures without adding overhead.

Case in point: Our recent work with a hedge fund client managing over $2B highlighted how OT filled critical gaps in their trading operations. The asset manager had a single internal trading desk based in the US but faced challenges trading Asian markets. The firm was passing orders off to a small number of brokers for overnight execution with pre-set parameters. Consequently, they limited their ability to react to market moves and missed liquidity and large block opportunities particularly in small and mid-caps. Rather than hire multiple traders with regional expertise and incur the associated costs—salaries, technology, and time to onboard & train the new personnel—Meraki took responsibility for APAC trading. By tapping into our Integrated Trade Management model, the firm was able to immediately deploy local APAC capability, gaining 24/6 coverage, regional trading expertise, and the ability to seamlessly trade in Asia without adding internal headcount. Importantly, this allowed the portfolio managers to focus on their core strategy and alpha generation without the disruption of market volatility. The firm now has a robust trading solution in an off-hours region which has allowed them to source better liquidity and prices, ultimately resulting in lower implementation costs and improved performance overall.

Myth 2: Outsourced Trading Means Losing Control

Some managers worry that outsourcing trading means losing control over the order process and critical decision-making. Their major fear: physical separation from the traders means loosening the grip on their portfolio. They don’t want their traders to be more than a literal arm’s length from them at times, or worse, unreachable. While this concern may be valid with some OT providers that have a high client to trader ratio, it is not true with all OT providers and certainly not true with Integrated Trade Management where the client to trader ratio is kept low for that specific purpose. We have recently written a whitepaper dedicated to the topic of control and detailed how managers can retain control with OT if they work with the right partner.

The key to control is integration into the workflow of your investment team, not necessarily the physical location of the traders. Some OT partners, like Meraki, offer tailored solutions and integrate directly with a fund’s existing investment team and infrastructure, acting as an extension of its internal team. With the ITM model, the outsourced traders are in regular contact with the investment team. They have time to dedicate to the client, while understanding their investment philosophy and strategy. Not only are they reachable around the clock, but they are fully immersed in the team; oftentimes communicating their own insights and experiences to the PM, allowing the PM to express his or her views more effectively. As always, the PM remains fully in control of the way his or her view is expressed and ultimately implemented.

This strong portfolio manager – trader connection in the ITM model affords the benefits of traditional OT engagements while still retaining full control for the client.

Myth 3: Outsourced Trading Is Only for Back-up or Basic Trading Needs

Outsourced trading is sometimes seen as a basic trading solution limited to straightforward equity trades. This couldn’t be further from the truth, especially with the new models of OT.

Modern OT firms like Meraki provide tailored solutions that excel in handling complex trading strategies, including exotic derivatives, futures and options, FX, distressed credit, rates, and trades in emerging markets debt and other illiquid instruments. For instance, Meraki has helped clients successfully navigate challenging situations like exiting large, illiquid positions in global emerging markets.

A recent trend has seen more sophisticated funds turn to OT for their ability to handle complex trades and multi-asset trades. Herein lies where choosing the right partner matters. Some OT providers focus mainly on equities and lack expertise in illiquid and exotic instruments. In contrast, Meraki’s approach follows the client’s investment strategy and supports a wide range of asset classes, from distressed debt to exotic FX and interest rate derivatives. 

For example, in a recent transaction, we helped our client exit large, illiquid positions in markets like Indonesia and Bangladesh, where trades of this magnitude require finesse and nuanced experience in order to maneuver without market disruption and leakage. Having this flexibility enables established funds to enter markets they might otherwise avoid simply due to lack of specific competencies internally. Far from being limited to US equities, OT is increasingly recognized as an essential resource for funds of all strategies aiming to enact their global investable universe​. ​ 

Myth 4: OT Providers are Opaque and Have Conflicts of Interest

This myth is only partially true because OT providers are often lumped together with introducing broker-dealers, raising very legitimate concerns about potential conflicts of interest. Again, not all OT models are created equal, and the right OT model and the right partner makes all the difference.

Traditional OT models may introduce conflicts of interests due to existing relationships with their executing broker parties and the risk that they prioritize those relationships over the client. The key to avoiding conflicts is alignment. Our model of engagement, ITM, is strictly focused on the client, placing them and their investment outcomes as the sole priority. The ITM model avoids this conflict by working only with each specific clients’ preferred counterparties and acts as an extension of the team rather than an intermediary with pre-existing relationships. 

A real-world example from our experience highlights how ITM can work for a client. A client transitioning from a traditional OT provider expressed frustration that their trades were being routed predominantly through a single counterparty due to an existing relationship of the former partner. Under Meraki’s model, they were able to preserve direct relationships with their brokers as well as ensuring best execution practices were being upheld. Moreover, Meraki’s team worked within the client’s existing infrastructure, retaining the client’s operational autonomy and control.

Myth 5: Outsourced Trading Is More Expensive than In-House Trading

Maintaining an in-house trading desk is far more expensive than some managers initially understand. A single mid-level trader can cost an investment firm upwards of $300,000 annually in total compensation, before benefits and taxes. Additionally, the costs of essential trading infrastructure such as Bloomberg terminals, live market data, order and execution management systems (OMS/EMS), TCA tools, and compliance support, as well as health benefits, and the total expense quickly becomes a substantial burden on the management company. 

For firms that trade across regions or asset classes, the need for multiple traders with specific market expertise and additional technology significantly compounds the costs. Firms trading Europe and Asia will need to hire multiple in-house traders to achieve the same level of coverage and expertise in those geographies, as well as meet industry best practice standards.

Not only can OT be more cost efficient in those circumstances but importantly, outsourced trading transforms fixed costs—like trader salaries & Bloomberg terminals– into variable costs tied directly to trading volume. This shift allows funds to allocate more resources to strategic areas like portfolio management and the investment team that will typically be more alpha generative, without being burdened by the overhead of an internal trading desk.  

Below is a hypothetical comparison of the costs associated with an internal trading desk versus an OT services model like Meraki. 

A few things to note here. Meraki primarily employs traders with extensive experience, boasting an average of over 15 years in the industry. Meanwhile, the typical internal trading desk can have a range of seniority. Here is the main difference in cost structure: as you can see from the chart, the costs with a traditional trading desk are fixed. You will need to pay salaries, benefits, bonuses regardless of how often you trade in a given year. In contrast, with OT, your costs are variable – depending on the volume and quantity of shares traded (velocity). They can be lower or higher on any given year, depending on how much the portfolio turns over. The benefit of this structure is that you only pay for the trading you need, and we feel that overall, it adds up to significant savings for the average fund manager.   

Wrapping Up

Misconceptions about outsourced trading should not prevent managers from exploring a solution that offers flexibility, cost savings, and scalable trading expertise. By debunking these five myths, we hope we have delineated the differences in classical OT models vs. Integrated Trade Management and at least piqued your curiosity on what ITM can do for you and your firm.

If you’re curious about how OT can address your fund’s specific needs, contact Meraki Global Advisors today for a consultation. Together, we’ll tailor a solution that aligns with your goals and elevates your trading strategy. 

Recent Whitepaper

Download our latest whitepaper, “In the Driver’s Seat: How Hedge Funds Can Leverage Outsourced Trading Without Losing Control.” Take the first step toward achieving more with your trading operation without giving up the control you value most.

DOWNLOAD HERE

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

Meraki Global Advisors LLC is a FINRA registered broker-dealer and member of SIPC headquartered in Park City, UT. The content provided herein is not an offer, solicitation or recommendation of any securities. Meraki and its representatives make no investment recommendations whatsoever. Past performance is not an indication of future results. This document may not be duplicated or copied, is protected by copyright law and may contain privileged or confidential information. Information contained herein does not constitute tax, legal or other professional advice. Content is for informational and educational purposes only. All rights reserved 2025.

What the UBS Outsourced Trading arm closure means for hedge funds considering alternatives

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UBS recently shuttered its outsourced trading business, highlighting a key truth: bigger isn’t always better. When outsourced trading is a small part of a larger business, priorities can shift unexpectedly, leaving clients in a precarious position. UBS’s core business was never outsourced trading, so it’s unlikely it moved the needle on global revenues.

What managers should do next for outsourced trading?

Some managers may be tempted to think that the outsourced trading model is flawed and that it is best to go back to building an internal trading desk.

While some precautions should be considered – you should not dismiss outsourced trading completely. The benefits are transformational, and the drawbacks of “bundled” services can be avoided with the right partner.

There are a few considerations to avoid disruption in OT services. 

Key considerations for outsourcing trading the right way

Investment managers should be cautious of the quality control risks when working with large firms that offer outsourced trading as a side or ancillary business. When outsourced trading is a non-core business line, the potential for subpar execution, lack of dedicated attention, hidden costs, and misalignment with client needs are far more likely. The firms may not prioritize trading quality, limit access to global liquidity, or sell order flow to offset “free” services. In the long run, these implicit costs, particularly around best execution, have a significant negative impact on a client’s performance.

UBS’s outsourced trading clients were given just three months to transition. Will they opt for another “bundled solution,” or choose a firm solely dedicated to outsourced trading? At Meraki Global Advisors, outsourced trading is our entire business. Every trade and relationship matters because its core to our operation and values. We’re here for the long term, dedicated to putting our clients first.

Outsourced trading done right: Integrated Trade Management features

Here’s how we serve our clients at Meraki:

  • Dedicated Attention: We are a customer-centric firm w/ a 3:1 client-to-trader ratio. No competing priorities because outsourced trading is our only business. 
  • Integrated Trade Management: We are a true extension of your investment team, taking time to understand your strategy and portfolio management style.
  • Unmatched Control: Maintain direct relationships with your executing brokers and PBs, preserving vital relationships.
  • Cost Efficiency: Transform your trading desk into a scalable, variable cost center aligned with your performance.
  • Tailored Solutions: We integrate directly into your workflow, operating as a true partner.
  • Conflict-Free Model: No brokerage accounts, no clearing agents, no hidden agendas. The most aligned model in every aspect.
  • Global Expertise: Access our experienced team across geographies and asset classes.

Interested in learning more? Read our latest whitepaper about retaining full control with outsourced trading.

If you’re affected by the UBS announcement and looking for a dedicated partner who prioritizes you, let’s talk. I’m also more than happy to connect you with any of our clients—because our results speak louder than any pitch could.

Meraki Global Advisors LLC is a FINRA registered broker-dealer and member of SIPC headquartered in Park City, UT. The content provided herein is not an offer, solicitation or recommendation of any securities. Meraki and its representatives make no investment recommendations whatsoever. Past performance is not an indication of future results. This document may not be duplicated or copied, is protected by copyright law and may contain privileged or confidential information. Information contained herein does not constitute tax, legal or other professional advice. Content is for informational and educational purposes only. All rights reserved 2025.

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

In the Driver’s Seat: How Hedge Funds Can Leverage Outsourced Trading Without Losing Control

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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.

DOWNLOAD HERE

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.

DOWNLOAD HERE

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

Vietnam Scraps Pre-Funding for Foreigner Investors in Bid to Boost Investment

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Vietnam will remove a requirement for overseas investors to fully pre-fund equity transactions, adding to the country’s efforts to increase its chances of a FTSE and MSCI market classification upgrade to emerging market status. The regulatory change, effective Nov. 2, 2024, should resolve a long-standing barrier that has prevented the nation from being upgraded from its current frontier market status by both FTSE and MSCI. The current 100% prefunding requirement for overseas investors has hindered large funds from fully investing in the Vietnam market.

Under the announced change, local brokerage firms will assess the risk and determine any pre-funding ratio requirements for their foreign institutional investor clients when placing orders. Regardless, client accounts must be funded by 9:30am on T+2 to complete normal trade settlement. If an overseas investor fails to complete the payment, the liability will be assumed by the broker.

“We think the changes would enable FTSE to upgrade Vietnam to Emerging markets within the next 12 months, leading to more than $500mm of passive inflows into the market and potential positive revision from MSCI,” J.P. Morgan Market Research said in a note.

Even with the removal of the pre-funding hurdle, most publicly traded Vietnamese companies are still subject to foreign ownership limitations (FOL). For example, the combined stake of foreign investors in any listed bank is limited to 30% and 49% for securities listed in the real estate, oil & gas, and construction materials sectors. When a listed Vietnamese company has “reached its FOL limit” (i.e., the proportion of shares available to foreign investors have all been acquired by foreigners), and a foreigner wants to buy more shares in the company, the purchaser must buy shares from a foreigner that already holds them. The foreigner that holds these shares typically demands a premium above the prevailing market price when selling their shares, triggering a mark-to-market loss for the new investor.

Sourcing liquidity presents different challenges in Asia than in the US and Europe, with Vietnam currently trading around USD$800mm on average per day across the entire listed market. On-the-ground and live trading experience is essential when navigating difficult liquidity landscapes. Firms investing in Vietnam should ensure their trading desk is well-versed in the idiosyncrasies of the Vietnam market while maintaining relationships with local and foreign brokers to benefit from color on discreet blocks available, as well as impactful news and flows. These lines of communication carry significant value to market participants. Additionally, traders must pay special consideration to information sharing. Careful management of order flow is important in all markets, especially in Asian emerging markets where governance and event risk can be significantly more common and corrosive, driving intraday volatility.

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

Game Changer: Australia’s Right to Disconnect Bill Set to Shake Up Asset Managers’ Trading Desks

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In early February 2024, in a landmark development, Australia has ushered in a new era of workplace rights with the passage of the Fair Work Legislation Amendment (Right to Disconnect) Bill. The effect date is six month from the date the Act receives royal assent. This legislation grants employees the authority to disregard unwarranted communications from their employers outside their regular working hours, with significant ramifications for non-compliance, including financial penalties and potential legal consequences.

The impetus behind this bill, spearheaded by the Fair Work Legislation Amendment, is to afford Australian workers the right to refrain from monitoring, reading, or responding to employer communication beyond the confines of their prescribed work hours. This statutory provision serves as a wall against employer overreach and seeks to rectify instances of labor exploitation, wherein employers might seek to extract additional work from their employees without commensurate compensation.

However, it’s important to note that exceptions exist for situations deemed genuine emergencies, where prompt communication may be needed. The overarching objective remains the protection of employees’ personal time and well-being from undue encroachment by employers.

The enactment of the Australian Fair Work Amendment (Right to Disconnect) Bill 2023 is poised to reshape and shake-up operational practices, particularly with Australian Asset managers. With Australian Superannuation Funds international asset allocations edging near 50%1, fund managers are now more reliant than ever on after-hours communications with their internal trading desks. Now, they may find their ability to contact in-house trading teams curtailed. There are several potential drawbacks for Australian Asset Managers:

  • Missed Opportunities: Financial markets operate globally, are highly correlated, and subject to constant fluctuations. Without the ability to instantly communicate with trading teams after hours, asset managers may miss out on valuable opportunities to capitalize on market movements or address emerging risks.
  • Reduced Flexibility: In dynamic market conditions, particularly during times of turmoil and volatility, flexibility is crucial for effective decision-making and risk management. Limiting communication after-hours could impede asset managers’ ability to adapt quickly to changing market conditions.
  • Competitive Disadvantage: In a highly competitive industry, asset managers unable to establish an effective in-house trading desk with traders available 24×6 may lose clients to competitors. Competitors ahead of the curve that have addressed these inefficiencies and reduced drag on fund performance from implicit costs generated by maintaining sub-optimal trading operations, estimated on average to impact fund performance by 1.2 – 2.7% p.a..2

Overall, restriction on after-hours communication with trading teams could impede asset managers’ ability to operate efficiently, stay competitive, and meet client expectations. However, outsourced trading firms with traders situated beyond Australian borders, like Meraki Global Advisors, which operates locations in Park City, UT, and Hong Kong, could provide a solution by offering seamless, round-the-clock trading services while adhering to the legal and regulatory framework.

Meraki Global Advisors operates in multiple time zones, allowing them to provide trading services during Australian after-hours when the local market is closed. This enables Australian asset managers to access global markets efficiently outside regular trading hours. With the option to outsource trading services, Australian asset managers gain flexibility in managing their operations. They can leverage the expertise and resources of their outsourced partner to handle trading activities beyond regular working hours, enabling them to focus on other strategic aspects of their business.

Meraki Global Advisors eliminates investment managers’ implicit and explicit deadweight loss resulting from inefficient trading desk architectures. Their trading services also offer cost advantages compared to maintaining an in-house trading team for after-hours, allowing the asset manager to pass through these trading services costs no differently than the multi-manager platforms have been, while simultaneously leveling up the experience and pedigree of their trading team. This cost efficiency becomes more appealing as Australian asset managers seek to optimize operations while adhering to new regulations. By spreading their trading activities across different jurisdictions, they can mitigate the risk of disruptions caused by local regulations or market events impacting a single location.

  1. NAB Super Insights Report 2023 ↩︎
  2. Quinlan & Associates Trading Up Report 2021 ↩︎

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

Korean Short Sale Ban

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The South Korean Financial Services Commission (FSC) announced Sunday, November 5, that they will impose a temporary short-sell ban on both KOSPI 200 and KOSDAQ 150 stocks effective November 6th until end of June 2024.

The FSC enacted the short-selling ban in order to review the current short-selling system. According to the FSC, institutions are engaged in naked short-selling, which is disallowed due to current Korean regulation. Regulators believe it leads to an unfair environment for market participants.

The ban’s objective is to give the regulator an opportunity to implement a real-time position check system that can monitor naked short-selling. Short sell bans are not new in South Korea: this is the fourth ban since 2008-2009, with the most recent one occurring in 2020-2021. The first comments regarding a possible ban came on the October 27th by ruling party member Mr. Yoon Chang-Hyun who said, “the time has come to stop short-selling altogether for three to six months and devise fundamental measures.” Following that, FSC head Mr . Kim Joo-Hyun said they will review current short-sell regulations from “square one,” according to Business Korea and other local news sources. The full-scale ban, though, seems to have caught most investors off guard.

Government Communication

The market initially interpreted the above comments to mean a ban was likely imminent, eventually leading the FSC to make a public statement refuting a potential short-sell ban, highlighting on their official FSC website on October 30th, “the push to ban short-selling is not true, so please be cautious in your reporting.” Then on November 3rd the FSC made a second statement specifically denying regulators would enact a short-sell ban.

On Sunday November 5th the South Korea government abruptly changed their view and decided to enforce the ban. This raised questions over the government’s political motives with elections expected in April.

The previous bans have all led to positive market performance: during the 2008 short-selling ban (Oct 2008-May 2009), the Kospi and Kosdaq were up 49% and 91% from their respective bottoms until the ban was lifted. In 2020 (Mar. 2020- Apr. 2021), the Kospi and Kosdaq were up 112% and 122% during the ban. Furthermore, the 2011 short-selling ban was only three months starting from August 10, 2011, but the Kospi and Kosdaq were up 6% and 18% during that period.

In addition, Korean regulators announced November 16 their intention to further restrict short selling rules for institutions, while bringing retail restrictions inline with institutions. The FSC will lower retail collateral requirements from 120% to 105%, while also capping the maximum borrow time on a stock to 90 days for short selling purposes for institutions. These proposals will need to be ratified via the legislative process before being implemented, according to the FSC.

The overall short-selling changes may jeopardize South Korea’s ongoing goal, as ambitious at it may seem, to gain MSCI admission into developed market status.

How can Meraki Help?

Asian Coverage from Hong Kong for Global Managers is One of Our Major Specialities

Korea made this announcement early Sunday in the US and Europe, surprising global investors with the announcement and the timing. Given the Sunday announcement, local time, the timing further complicated the ability to trade objectively and effectively on the Monday morning when Korea opened without a live Asian trading desk.

Risk-driven events like this are inherently difficult to manage and this particular event generated 2-sigma intraday volatility within the markets, while the EV Battery makers collectively moved +23% on the day and single stocks like Ecopro (247540 KS) and Posco FM (003670 KS) reached limit up +30% before the close.

About Meraki Hong Kong

Our local Hong Kong office employs a full trading team available and experienced in all APAC markets. Our traders have worked locally in both Hong Kong and India and collectively have decades of experience in the region and understand the nuances of the Asian markets. Cognizant of information leakage and protecting client orders, our 3:1 client to trader ratio, as well as Meraki’s neutral, unbiased trading structure, allows Meraki to be completely aligned with its clients’ trading objectives. Please call us to provide more market colour and strategic insights.

We remain, sincerely yours, the trading team, Meraki Hong Kong.

India Market Changes Effective January 2023

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On January 27, 2023, India’s exchanges completed the phased monthly transition from a T+2 to a T+1 settlement cycle for all top-listed securities, which includes shares, exchange-traded funds (ETFs), real estate investment trusts (REITs), infrastructure investment trusts (InvITs), sovereign gold bond (SGB), government bonds, and corporate bonds trading in the equity segment. While most large stock markets, like in the US, Europe, and Japan, still follow a T+2 settlement cycle, India will join China in shortening its settlement cycle. Chinese stocks on the exchange markets settle T+0 for securities and T+1 for cash.

The settlement cycle transition is expected to benefit investors by working to increase market liquidity while reducing settlement risk. A shortened cycle not only reduces settlement time but also reduces and frees up the capital required to collateralize that risk. While this has halved the settlement time for equities in India, it has presented its own set of challenges for Asset Managers (AMs) without a presence in the Asian region. Meraki will examine how this new rule, with just over a half year in existence, has affected AMs in their trading workloads and increased time spent by their staff.

Complications for Asset Managers Operating in Distant Time Zones

The impact of the shift to T+1 will not be uniform across all firms. Smaller firms, in particular, may face greater difficulties due to the disparities in the size and locations of their teams. With reduced settlement times, these firms may experience an increase in settlement fails, as their teams may struggle to keep up with the faster pace of trade settlement during irregular business hours. Furthermore, smaller firms often rely on legacy batch overnight systems that may not be equipped to handle the increased volumes that will come with T+1. Therefore implementing new systems capable of managing the higher transaction volumes will be necessary, leading to additional operational infrastructure (headcount and IT) costs for these firms.

At the crux of the change is the trade confirmation timeline and FX/funding needs. The change in pay-in/pay-out timings simply means that timelines are now reduced by one day. Previously, stocks were settled by approximately 2pm IST on T+2; now, they settle at 2pm on T+1, and all other settlement related timelines will move forward similarly. Please see the indicative timelines below:

Indicative Timelines : Indian Stock Markets Shift To T+1 Settlement Cycle

Confirmation of trades by custodians must be done on T-day before 7:30p IST (previously 1:00p on T+1), and the confirmation of trades takes place only after the trade is matched and the FX/funds are in place. With a T-day timeline, clients must now give the FX and matching instructions either pre-trade or during the day. This is typically done by generating a trade and currency file to the custodian after the close in order to generate proper FX amounts and allow for trade matching on the execution side. Because the INR is restricted, only the custodians can trade FX on behalf of the client.

Execution and Settlement Complications

On the execution side, traders may need to stop trading before the close or prefund their onshore accounts. Prefunding onshore accounts in INR opens the asset managers to FX risk that they otherwise would not have taken in order to deliver INR on time for funding their trades. Additionally, the AMs need to invest further in headcount or find current employees willing to work live Indian hours to solve settlement and funding issues on a T+0 basis in order to abide by new exchange rules.

Outside of the explicit operational costs, there is a considerable risk of burnout, trading and operations team fatigue, and other issues that arise from live trading and operational needs for a market that has the last and latest opening time of every major APAC regional market and also closes a full 12 hours after Australia opens for trading in the region. The typical workarounds utilized include handing India off by the Asia teams to the European teams when they arrive in the morning, or if there is not a dedicated live trader or trading team and operations team for each region, the Asia time zoned teams stop trading the India markets early. Some traders working both shifts even take a nap for a few hours and wake up to finalize the T+0 matching process. All these scenarios can lead to operational problems, poor trading execution, missed liquidity, and possible errors that can potentially prove costly. In addition, trader burnout and high rates of employee turnover may be common with this trading arrangement.

How Meraki Can Help

Given India’s nuanced nature, our expertise in all aspects of trading, settlement, and funding in India is unmatched, and we have the local resources and knowledge to expeditiously solve problems as they may arise. Meraki’s Founder and Managing Partner, Benjamin Arnold, traded for BNP Paribas and Goldman Sachs on the ground in India for four years and then another two years from Hong Kong. Meraki’s Head of APAC Trading, now based in Hong Kong, lived and traded in India for two years for a global investment bank.

Additionally, our unique outsourced trading agreements with our clients allow us to execute on behalf of the investment manager and/or fund(s). In contrast, our primary competitors cannot do so as effectively, placing us in a differentiated and superior position during communications with sell side trading desks, custodians, banks, and investment managers. Meraki Global Advisors’ seamless business structure allows the investment manager to save explicit costs on personnel and IT, as well as mitigating concerns of burnout and quality of life that arise from India’s unique and new trading requirements and distant time zone.

Please contact Mary McAvay at mm@mga-us.com to discuss how Meraki can work closely with you to help solve your Indian trading issues.

Outsourced Trading: Choosing a Fully Integrated Buyside Model Versus A Traditional Brokerage

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The investment industry refers to outsourced trading as a trading relationship in which the investment manager gives its portfolio order to broker-dealer counterparties to execute on their behalf.  What gets lost in this casual understanding is the inherent conflicts of interest that may exist when giving their counterparty these orders with respect to best execution, payment for order flow, and information leakage. The industry has warped the true meaning of outsourced trading into a homogenous term making it easy to confuse broking with outsourced trading, as both involve the handling of orders for further trading/execution and anonymity for moving orders.

Key differences exist between a fully integrated buyside outsourced trading desk and a traditional wrapped brokerage service offered by multi-service providers. In a fully integrated outsourced trading desk relationship, the trader serves as a partner, engaging in trading communication, understanding and communicating information to investment managers to further the investment thesis, and ensuring multiple venues and algorithmic infrastructure are in place to facilitate best execution. Unlike services from large broker-dealers, there is no payment for order flow, no internal crossing of order flow, no principal order book, and no incentive outside of getting the best execution for the buyside client. In addition, the end client can be linked to the commission wallet, which can help access the deal calendar and brokerage research resources. Trust is a critical component of this partnership, as the portfolio managers must have confidence in the provider’s ability to act on its behalf, handle trades in specific ways, and align its interests with those of the fund.

Understanding Brokering: Traditional Broker Services

In its traditional sense, broking refers to the intermediation services brokers provide in facilitating trades between buyers and sellers. Brokers act as intermediaries, executing orders on behalf of clients and earning commissions or fees in return. These services typically include trade execution, market research, access to liquidity, and limited ancillary functions. They can also refer to payment for order flow, which is an ancillary financial benefit a broker can earn from their customer’s order flow.

Unveiling Outsourced Trading: Redefining the Approach and Investment Manager Considerations

Outsourced trading represents a paradigm shift from traditional broking arrangements. It involves delegating trading operations to specialized firms that offer a comprehensive suite of services beyond execution. Outsourced trading providers provide expertise, technology, and operational efficiency, acting as strategic partners rather than traditional brokers.

  • Outsourced trading enables the investment manager to earn credit for commissions from executing brokers and to properly allocate its commission wallet across the street, which can help on the deal calendar.
  • It allows for transparency during block trading and bid-wanted situations so the broker can price large trades with tighter spreads.
  • Outsourced trading allows the trader to act as a true extension of the investment process and to become fully integrated into risk and trading conversations at the individual stock level as well as at the portfolio level.

For a client seeking access to a specialized broker they don’t currently work with, it’s not as simple as picking up the phone and placing a trade. There are onboarding procedures that need to be followed, including KYC (know your customer), AML (anti-money laundering), connectivity, and contractual matters. However, due to the nature of their business, an outsourced trading provider is better equipped to gain access to that specialist broker.

The Benefits of Outsourced Trading Over Broker Services

Outsourced trading offers numerous advantages that set it apart from traditional broker services:

Enhanced Efficiency

Outsourced trading firms provide a holistic solution encompassing trade execution, risk management, compliance, and technology integration. This streamlined approach optimizes operational efficiency and allows asset managers (“AMs”) to focus on core competencies.

Cost-effectiveness

By outsourcing trading operations, investment managers can minimize the need for substantial investments in trading infrastructure, technology, and talent acquisition. Outsourced trading providers offer scalable solutions, enabling asset managers to expand their trading capabilities without incurring significant fixed costs.

Access to Expertise and Technology

Outsourced trading firms bring specialized knowledge, market insights, and advanced technology platforms to the table. This empowers asset managers’ investment management team(s) with real-time data, advanced analytics, and cutting-edge tools, facilitating informed decision-making.

Risk Management and Compliance

Outsourced trading providers specialize in navigating complex regulatory frameworks and employ robust risk management systems. They work to ensure compliance with regulatory requirements, transaction reporting, and best execution practices reducing institutional risk exposure.

Types of Outsourced Trading Firms

Outsourced trading firms can be categorized based on their areas of specialization:

Full-Service Providers

These firms offer end-to-end trading solutions, encompassing trade execution, risk management, compliance, technology integration, and post-trade support.

We at Meraki Global Advisors, a prominent outsourced trading firm, are known for our comprehensive global range of services. With a deep understanding of global markets, Meraki provides tailored solutions for equities, fixed income, foreign exchange, derivatives, and all other asset classes. Our expertise extends beyond execution, encompassing risk management, compliance, technology integration, and strategic guidance, making us an ideal partner for investment management teams seeking efficient and scalable trading solutions.

Specialized Providers

These firms focus on specific asset classes, trading strategies, or geographic regions. They offer targeted expertise and tailored solutions to cater to the unique needs of asset managers operating in those domains.

Expands the Fund’s Expertise and Widens its Reach

Outsourced trading represents a departure from traditional broking arrangements, offering asset managers a range of benefits beyond execution. A diverse outsourced firm can provide geographical expertise, asset-type expertise, or both to existing trading desks looking for specialization or funds looking for a fully outsourced model. 

A diverse outsourced firm should feel as comfortable trading US equities as it does trading CDS or Asian OTC derivatives while understanding the market limitations and requirements to execute these instruments in each location. In turn, delivering knowledge and experience to the fund manager allows them to capitalize on certain investment opportunities or understand liquidity constraints, reducing valuable time spent researching ideas that are not applicable to their liquidity constraints.

As the demand for outsourced trading increases, Meraki continues to expand and meet the needs of our clients to help them achieve their goals. In just four years, we have expanded globally from our US headquarters and team with best-in-class global multi-asset buyside traders and middle-back-office support. We have also proudly maintained an industry-low client-to-trader ratio critical to providing a truly integrated relationship and premium service. We recognize that outsourcing may be a significant change for some funds; we are eager to speak with any managers interested in learning more about the advantages of outsourced trading and the suite of services provided by Meraki Global Advisors.

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

Is Your Outsourced Trading Provider Global?

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The Benefits of Having a Local Presence in the Asia-Pacific Region

For asset management firms based outside the APAC region, trading APAC markets is a challenging mosaic of regulatory, operational, and tactical matters. In such an environment, entrusting asian orders to brokers overnight and expecting the best execution outcomes has been proven to be inconsistent at best.

Building and staffing an in-house off-hours trading desk or an entire regional office has historically been the solution, but the associated costs are often prohibitively high. As a result, many firms have chosen to engage with an outsourced trading provider to optimize performance.

Due to the fragmented and competitive nature of trading in Asia, firms must take extra care to ensure goodness-of-fit with an outsourced trading provider. It would be beneficial to ask the following questions while assessing your outsourced trading provider: Is the provider truly positioned to succeed in the challenging Asian markets? Will the provider be a trustworthy partner and experienced guide in complicated conditions? 

In our experience, successful trading in Asia demands three core capabilities: (1) Careful management of order flow; (2) Deep, localized knowledge and (3) Well-established relationships. Here we explore several characteristics of Asian markets and illustrate how these core capabilities build a foundation for success.

Less liquidity for block trades

Sourcing liquidity presents different challenges in Asia than in the US and Europe. In Asia, most names are less liquid, and many countries lack dark pools – making block trades particularly challenging. 

On-the-ground experience is essential when navigating difficult liquidity landscapes. Firms engaging with outsourced trading providers should ensure their assigned traders are well versed in the idiosyncrasies of each country where securities are being actively traded, including facilitation risk options and regulations. Equally important, are close relationships with sell-side connections and local brokers for both color and liquidity. Traders with deep relationships will benefit from timely updates on blocks as well as impactful news and flows – an advantage that carries significant value.

Additionally, traders must pay special consideration to information sharing, judiciously choosing how much information is shared and with whom. While certain block desks are consistent performers, there is always risk of leakage, which can be very impactful in most Asian markets.

More volatility driven by governance and event risk

Careful management and trading of order flow is important in all markets – but even more so in Asia, where governance and event risk can be significantly more common and corrosive, driving intraday price swings that often dwarf those seen in the US and Europe. As such, the trust required to handle order flow in the most appropriate manner is higher in Asia than developed markets. If a trader simply inputs orders into an algorithm with little care or attention, the results in Asia are likely to be sub-optimal.

Diverse market structures and regulations

Given that Asia lacks a single regulatory framework – in the way MiFIDII provides structure in Europe, for example – traders are faced with a diverse array of market structure dynamics. Without the operational expertise, ever-changing regulations can prove to be complicated.

When confronting this challenge, local knowledge and relationships are of the utmost importance. To ensure timely notification of regulatory changes and potential impacts, firms should identify a trading partner who is entrenched in the local markets and connected with the street and various levels of people within relevant organizations. A broker who may be insufficiently familiar with market structures and regulations can create a range of problems, including issues with entry and exit of positions and trade settlement.

Greater retail participation

Retail participation is generally much higher in Asia than developed markets. The Chinese equity market, for example, is largely dominated by retail investors: More than 70% of turnover originates from retail participants, relative to approximately 15% to 20% in the US. 

In markets with size-able retail participation, news reported in the local language can impact markets before it reaches primary information streams, such as Bloomberg and Reuters. This is particularly true in China, Hong Kong, Japan, and South Korea. Additionally, local blogs and news sharing apps can generate huge retail interest, as does the morning hard-copy news in China.

This dynamic creates additional opportunities and risks for offshore institutional investors. Given the profound impact retail trading can have on short-term price momentum in Asian markets – for both single names and indexes – traders must be able to provide real-time explanations and interpretations of themes which have captured the attention of a given retail audience. Such capabilities stem from deep, localized knowledge and a broad network of relationships.

Improve your APAC trading with Meraki Global Advisors

The Meraki team has the expertise and access required to trade every asset class worldwide, including all markets in Asia. Our senior leaders draw on extensive experience in the region:

Donald Lee, Head of Asia Pacific and Head of Meraki Global Advisors (HK) Ltd – Don has over 27 years of experience in Asia Pacific institutional equities split between Seoul and Hong Kong. Before joining Meraki, Don held senior management positions in the APAC -wide cash equities and client executions businesses of Credit Suisse and Deutsche Bank based out of Hong Kong.

Jeffrey Ho, Managing Director of Meraki Global Advisors (HK) Ltd – Jeffrey has over 25 years of buy-side experience trading global markets in Europe and Asia. Before joining Meraki, Jeffrey was a trader at Tora Outsourced Trading, Segantii Capital Management, and prior spent 15 years at Deutsche Bank (DB) in Hong Kong where he was a Director and Senior Trader. 

Benjamin Arnold, Founder and Managing Partner – Ben previously worked as Executive Director on the equity and equity derivatives sales-trading desk at Goldman Sachs in Hong Kong and Mumbai, India with a primary focus on large non-ECM block trading. Before joining Goldman Sachs, Ben was a Vice President on the equity and equity derivatives sales-trading desk at BNP Paribas in Mumbai.

EJ Stockley, Partner and Global Head of Trading – EJ previously worked as a trader at First State Investments in the UK and Singapore, gaining global multi-asset trading experience in Pan-Asian, EMEA, and Americas markets.

Simon Kelt, Head of APAC Trading – Simon has over 15 years’ experience trading global markets in both Europe and Asia. He spent the last 10 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.

How Meraki Global Advisors can help

As a value-added service to our outsourced trading clients, we help managers create a strategic marketing strategy and increase their firm’s awareness among a unique set of investors and allocators. Our experienced team provides start-up advisory services, identifies actionable ways to improve decks and pitches, and creates prospective allocator lists for select introductions. Our services are suited for a diverse range of clients, extending from traditional long-short emerging managers in the very early stages to managers running a multi-strategy platform and existing multi-billion-dollar funds trading globally across asset classes.

As the premier global multi-asset outsourced trading firm, we take pride in putting our clients’ interests first. Built on a foundation of confidentiality, our unique conflict-free model empowers funds to garner optimal access to liquidity.

Contact us to learn more about Meraki Global Advisors’ outsourced trading capabilities and capital introduction services.

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

Institutionalizing Family Offices through Outsourced Trading

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Family offices designed to invest and grow the net worth of ultra-wealthy families have grown in number, size, and sophistication. This has been driven by shifting economic and market forces, alongside families’ increasing desire for flexibility and control. By sharpening their due diligence, expertise, and ability to isolate the right combination of idea, team and asset allocation – many family offices have emerged as institutionalized players. These modern offices have established themselves as sophisticated investors in today’s public and private market ecosystem.

Many institutionalized family offices pursue an intensive approach supported by best-in-class service providers. Critical and complex functions—such as portfolio and risk management—are frequently outsourced to experts to attain first-in-class service. Here we examine how outsourced trading can deliver a greater level of institutionalization to family offices, which can be both cost-effective and value generative. With an understanding that each family office has unique and specialized needs, we explore various trading desk models and analyze key points when seeking to maximize the value from traders.

The opportunity to optimize trading

While many family offices have large exposures to real estate and external alternative managers, they also have exposure to yield products in the form of corporate and government bonds, FX, equities, and ETFs. Services supporting these traditional asset classes often fall short when compared to the sophisticated infrastructure family offices have grown accustomed to accessing via their alternative manager investments.

Trading family office assets is one such service with significant runway for optimization. Customarily, family offices have traded their bonds and equity holdings through private banking relationships. Trading through a private bank, however, is expensive and constricted. This approach limits liquidity sources and typically does not utilize professional highly experienced multi-asset traders.

One possible solution: Create an internal trading desk

To address the shortcomings of trading through a private bank, some of the largest single-family offices have built internal trading desks. While this solution provides a key benefit—superior execution—it requires large capital outlays to operate a single-family office, let alone the considerable costs for recruiting a team of top talent to work solely for one family. This strategy also incurs high costs to maintain the systems required to run a trading desk, not to mention the additional operational risks that follow. It is no surprise then that only a small percentage of families set up their own family office.

For most family offices, the value proposition of an internal trading desk is sub-optimal due to likely operational redundancies—most commonly, periods of inactivity during which no trading takes place. Without an immediate value additive task or project to fill the gap when traders have down time, the operational burden and fixed costs of an internal trading desk make it an ineffective solution. Furthermore, internal family office trading teams are often undersized, so execution quality suffers during busy and volatile days.

A more efficient solution: Partner with an outsourced trading provider

Family offices that partner with an outsourced trading provider garner the same—and in most cases, superior—institutional-quality execution generated by an internal trading desk but accomplished at a more efficient cost. Outsourced trading services empower family offices to cost-effectively achieve execution results in line with the high quality of service they have come to expect in the other areas of their business.

Family offices can choose from a range of models to secure the most compelling value proposition. In a variable cost model, for example, a fee is charged per trade. Family offices can also opt to pay a fixed monthly fee for all services rendered. The decision is often based on the number of trades and additional services a given firm requires.

Maximizing the advantages of outsourced trading

When considering an outsourced trading provider, family offices can maximize the potential advantage by partnering with a firm positioned to deliver on key objectives, such as:

  • Alignment – Maximum transparency, objectivity and alignment are vital to family offices. As such, it is important to identify an outsourced trading provider that always puts the interests of the family office first and commits to complete alignment with family policies. Family offices should examine how the outsourced trading provider earns money—including rebates, credits and funds earned by favoring certain relationships—and seek to understand the driving forces behind the firm’s overall business model.

    At Meraki Global Advisors, our services are conflict-free. We are only paid by our clients for execution; we receive no other revenue streams.
  • Confidentiality – Discretion and confidentiality are paramount. Family offices should examine an outsourced trading provider’s approach to confidentiality from multiple angles, including the number of clients covered by their trader(s) and legal protections in place. It is also important to understand the extent to which orders are visible as trades flow through the outsourced trading partner’s system.

    Meraki’s processes have been engineered to create an environment of ultra-confidentiality. They are tried and tested by $1+ billion hedge funds that place a similarly strong emphasis on confidentiality as family offices. Furthermore, our targeted client-to-trader ratio is 3:1.
  • Risk Management – IT security and infrastructure are other operational components of data security that family offices should consider. Cyber risk, improper trade authorizations, data breaches, and fraud are all relevant to maintaining proper risk management. Ensuring your outsourced trading provider has a sound risk management framework with proven effective internal controls is paramount.

    Meraki conducts audits of its information and security measures to ensure the protection of all sensitive data. Additionally, Meraki has established Cyber Security Policies, which are periodically updated to mitigate risks.
  • Experience – When family offices can rely on experienced traders, they feel confident that a trusted team member is dedicated to helping the office navigate both calm and choppy waters. The ability to lean on a trader’s experience-driven insight into complex situations and during moments of market volatility creates tangible value for the family office. We are experienced in trading global cross-asset. This means we can help family offices build or reduce stakes in companies through equity and/or derivatives trading and help put on hedge trades.

    Meraki’s team brings decades of industry experience from top hedge funds, family offices, traditional asset managers, and the world’s preeminent investment banks. With global visibility and acumen across every asset class, we are uniquely positioned to assess cross-product relationships and provide insights into the strength of potential or real market movements.

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