Under pressure from indexed funds to demonstrate their value to investors, active managers are opting for ‘trading-as-a-service’ (TaaS) from large providers, allowing them to focus on their core expertise. The latest to join the TaaS ranks is Swiss-based investment firm 2Xideas, which has US$2 bn assets under management.
2Xideas initially partnered with Northern Trust in 2022 for fund accounting, financial reporting, transfer agency, custody, and depositary services. Northern Trust’s outsourced trading services has more than doubled its clients over the past three years, the firm says, with more than 100 firms now using its integrated trading solutions (ITS) globally.
2Xideas’s four managed funds and additional managed accounts will now be exclusively serviced by Northern Trust’s outsourced trading provision.
Outsourcing is an increasingly attractive prospect to asset managers and owners, with the last few years seeing a major uptick in the number of firms keen to gain flexibility and agility, reduce risk and cost and keep up with rapidly developing technology and regulatory requirements.
Roger Meister, CEO of 2Xideas, explained that this was the reasoning behind the expansion of its partnership with Northern Trust. “We began searching for a solution that would streamline our trading processes, allowing us to focus on what matters most – delivering exceptional results for our clients. By leveraging ITS, we’re able to unlock access to Northern Trust’s substantial liquidity and scale, which allows us to drive growth while exceeding our clients’ expectations.”
Clients are now looking to outsource the entire trade lifecycle, the bank explained. ITS provides straight-through processing, integrating front, middle and back-office data flows, reducing reliance on manual intervention and increasing operational efficiency, it added.
“Northern Trust’s robust, conflict-free, agency operating model allows for cost-contained growth while improving business resiliency and control,” affirmed Amy Thorne, head of ITS for EMEA. “We look forward to supporting 2Xideas at both firm and fund level.”
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