April 20, 2026 / by Meraki Global Advisors
By Benjamin Arnold and Mary McAvey | Meraki Global Advisors
Non-U.S. equities account for 35–40% of global market capitalization. Institutional allocators increasingly expect managers to access that opportunity set. If you’re running a domestic-only mandate, you already feel the pressure: allocators view narrow U.S. equity strategies as replicable through cheaper passive products. The question isn’t whether to expand globally—it’s whether you can do it without breaking your operation.
Most managers underestimate what’s involved. The instinct is to “just add Europe” or hire an overnight trader for Asia. That framing is dangerously wrong. What looks like an incremental adjustment is actually a structural transformation of your entire trading infrastructure.
Crossing a single time zone adds hours to your trading day and multiplies infrastructure requirements across every operational dimension. A U.S.-focused desk runs efficiently with one or two traders on a single technology stack. The moment you add European or Asian mandates, you need near 24-hour, follow-the-sun coverage.
Despite what you might think, one overnight trader doesn’t solve the problem. What happens when that trader is sick, on vacation, or resigns? Industry best practice requires a minimum of two traders per region just to maintain continuity. Factor in technology costs like Bloomberg terminals at $24,000–32,000 per user annually, jurisdiction-specific OMS/EMS systems, regional data feeds, plus compliance infrastructure for MiFID II in Europe, capital controls in Asia, and varying short-selling regulations across every market. The real cost of building an internal global trading desk typically runs $1.35–2.6 million annually in fixed overhead.
That number hits your P&L regardless of how much you trade.
Beyond the obvious fixed costs, global trading introduces execution risks that most managers never quantify. European equity markets are among the most fragmented in the world—liquidity is distributed across dozens of lit exchanges, dark pools, and Systematic Internalizers, each with distinct risk-return profiles. An order routed to the wrong dark pool can signal your position intentions and attract adverse selection from sophisticated counterparties.
The result is implementation shortfall: execution prices materially worse than your decision-time prices. Managers can lose 20–30 basis points on individual trades without realizing it, because these costs embed in execution prices rather than appearing as line-item fees. Academic research on long-short equity hedge funds has identified average implementation shortfall of 262 basis points. On $200 million in annual turnover, even a 20 basis point shortfall translates to $400,000 in lost performance, before you’ve accounted for the FX conversion spreads your prime broker is quietly adding to every international trade.
If Europe is deceptively complex, Asian markets are even more punishing. Most operate on T+1 or T+2 settlement with minimal tolerance for error. Allocation mistakes in omnibus accounts can become locked post-settlement, creating cascading financial exposure. Short-selling violations, even unintentional ones, result in substantial fines, regulatory scrutiny, and counterparty damage. Capital controls in Korea, Taiwan, India, and China shift based on macroeconomic conditions and require real-time expertise to navigate.
Without local expertise or a specialized partner with on-the-ground knowledge, you’re absorbing operational risk that directly competes with your alpha generation.
The economics of global expansion increasingly favor partnership over internal build-out. Industry data shows that 39% of asset managers now supplement internal teams with outsourced providers, up from just 5% in 2020. The shift reflects a practical reality: outsourced trading converts fixed infrastructure costs into variable expenses tied to actual trading activity. During low-turnover periods, you’re not paying for idle capacity. When opportunities spike, you scale immediately without hiring.
But not all outsourced trading models are equal. Traditional broker-affiliated providers can introduce the same conflicts as concentrated prime broker execution—order flow internalization, limited routing transparency, and business models that don’t align with your execution objectives. The Integrated Trade Management (ITM) model addresses these structural issues through pure agency execution, multi-broker access through your existing counterparty network, focused client-to-trader ratios, and embedded transaction cost analysis.
Before committing capital to global expansion, ask yourself: Do you have genuine 24-hour coverage with adequate redundancy? Who specifically advocates for your execution quality? Can you measure your true implementation costs? Have you concentrated execution with a single counterparty? And does your cost structure actually align with your activity profile?
If the honest answers reveal gaps, you’re not alone—most managers discover them. The key is addressing them before expansion, not under operational pressure. Our new whitepaper, Going Global: How Asset Managers Can Expand Their Investable Universe, Responsibly, provides the complete framework—infrastructure requirements, regional complexity, hidden costs, partnership models, and a decision framework for getting it right.
[Download the full whitepaper →]
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