State Street has acquired CF Global Trading, a global firm specialising in outsourced trading on an agency basis for a variety of asset classes including equities, listed derivatives and fixed income. The terms of the deal have not been disclosed. Dan Morgan, global head of portfolio solutions at State Street, spoke exclusively to BEST EXECUTION on why the UK and EU is a focus for the firm and how the acquisition fits into States Street’s wider offering.
The acquisition is designed to strengthen State Street’s outsourced offering, extending the firm’s services to clients in the UK and EU, where the firm says business is growing the fastest. Morgan explained why: market volatility, margin compression, increased regulation and cost pressures have presented multiple challenges for asset managers and asset owners globally. “Streamlining processes will allow them to focus on their core competencies of investment selection and alpha generation. In this environment, outsourced trading has emerged as an opportunity to efficiently drive growth and optimise resources,” Morgan said.
“The pace of demand for outsourced trading has accelerated over the years, as outsourced trading firms can help smaller- to medium-sized firms better meet regulatory expectations around items such as best execution, including the introduction of the EU Markets in Financial Instruments Directive (MiFID II) in 2018, as well as increased expenses.”
“Our clients, particularly in Europe, have asked us to support them in this space. With the acquisition of CF Global Trading, our new combined footprint for outsourced trading includes offices in Boston, New York, Toronto, London, Lisbon, Hong Kong and Sydney with the added benefit of CF Global Trading’s expert traders,” Morgan added.
The addition of CF Global Trading is designed to enhance the firm’s current outsourced trading services.
“Outsourced trading can be a strategic extension of a client’s current trading capabilities and/or a way for clients to minimise overhead costs of trading. At the same time, it can be in conjunction with downstream delegation of middle and back office functions,” Morgan said.
“This acquisition allows us to offer a complete global trading solution as part of our State Street Alpha front-to back platform. State Street has a history of providing enterprise outsourcing services to our clients, and the addition of CF Global Trading strengthens our multi-asset class agency trading outsourcing offering,” Morgan added.
CF Global Trading CEO and co-founder Scott Chace, said: “Joining State Street allows our team to continue to build on our client platform and award-winning outsourced trading experience with the scale that comes with being part of one of the world’s largest institutional financial services providers.
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