Leveraging Outset Global’s Local Presence to Improve Asia Pacific Execution

Tim O’Halloran, Managing Director
Outset Global

Last month, in an article entitled “The Institutionalization of Outsourced Trading: A View from the Front Lines of a Growing Business,” we highlighted six popular use cases, or reasons why our clients engage Outset Global.

Leveraging our local expertise to trade offshore markets has been a popular request since our inception in 2011. Today we share a few observations on trading APAC markets, our fastest growing region.

Background

First and foremost, Asia is a very difficult region to trade. It stretches across a 7-hour time difference from New Zealand’s open to India’s close, a relay of markets that no trader based in New York or London can realistically cover.

The Asia Pacific region presents many challenges:

  • Multiple exchanges, each with their own market structure, rules, settlement conventions and quirks.
  • Major markets such as Australia, China, Hong Kong, India, Japan, South Korea and Taiwan plus a long tail of emerging and frontier markets.
  • Well over 20 onshore equity and derivative venues, when taken in full.
  • A fragmented liquidity landscape that rewards local knowledge and punishes anyone trading blind.
  • Market-moving news, government policy shifts and corporate actions that break while the rest of the world is asleep.
  • Local broker and counterparty relationships that take years on the ground to build.

Given these challenges, it is no wonder that many investors avoid the region or accept sub-optimal execution. For many years we have watched North American managers struggle to trade the APAC region. Some employ a single night trader, others may staff a rotating team to cover the world from the U.S. Alternatively, it is common to see investment managers simply leave overnight APAC orders with the sell-side at the end of the U.S. trading day. Execution results are typically received the following morning.

But there is a better way.

Outset Global provides a turnkey, variable-cost solution for trading the region. By simply adding us to your broker list, you immediately have access to an experienced, local, buy-side positioned trading team to represent you in the region in real-time. We put your strategies to work at your direction.

This customized solution cannot be replicated without a meaningful local presence.

Outset Global’s Infrastructure

Navigating the Asia Pacific region can be difficult, thus Outset Global now employs a team of four traders (and growing) in the region along with dedicated operations personnel. We face over 80 sell-side brokers in APAC alone, including all the bulges and local specialty firms.

We anchored our Asia desk in Hong Kong — the region’s financial services hub, and quite simply, where the deepest talent pool sits. From there, coverage is fed by locals across the region, giving native-market insight from ANZ at the open, through Japan, Korea and Greater China, into ASEAN and India.
That local footprint also unlocks proper sell-side coverage in-region — critical for our long-only clients trading Korea/Taiwan and wider ID cash markets, where on-the-ground broker relationships, local language and real-time market colour ensure better trading outcomes.

We provide full execution capability across cash and swap, so clients can access the region however they need to trade it.
For our clients, that means deeper coverage across the region, more capacity during Asia hours, and continued access to the kind of execution expertise that turns a difficult market into a tradeable one.

This results in improved information flow to investment teams and/or in-house traders and an improved framework for best execution. It also avoids (or postpones) the expense of putting boots on the ground in the region until a manager’s AUM has scaled to merit such a meaningful capital decision.
Our scale, independence and expert team, assembled over 15 years, positions Outset Global to help our clients navigate the complexities of the APAC marketplace.

We hope that this glimpse into our resources and the simplicity of engaging us is helpful. To learn more about Outset Global or to discuss our APAC capabilities please reach out to us at info@outsetglobal.com.

  1. It would be hard to call this anything but “outsourcing” one’s execution.
  2. Most of our execution in the region has historically supported investment managers and asset owners who do not have a local trading presence. However, as we have scaled the business, larger AUM managers now engage us when our reach and pertinence with the APAC sell-side exceeds their own.