Simon Kelt Head of APAC Trading of Meraki Global Advisors

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
Mary McAvey
VP of Business Development
(646) 666-7041