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REQUEST TOURMALINE’S RESPONSE TO THE TRADE’S LETTER TO THE EDITOR…

Re: A Message to the Buy-Side on Outsourced Trading

Tourmaline sets the record straight on outsourced trading, highlighting expertise, operational efficiencies and cost savings.

In December 2019, a senior buy-side trader wrote an anonymous letter that appeared in The TRADE and included multiple misrepresentations regarding the nature of outsourced trading. We responded with a letter of our own, outlining some basic facts: what outsourced trading is, why an increasing number of buy-side firms are leveraging the model and what it means for the industry.

We are pleased to have the opportunity to educate the industry amid the rapid growth of the outsourced and supplemental trading space.

β€œThe thrust of the editorial is an assertion that outsourced trading is essentially a vehicle for asset managers to shift costs to funds. In reality, the benefits – in some cases the necessity – for a buy side firm to use outsourced trading services often have nothing to do with transaction costs.”

β€” Aaron Hantman, CEO, Tourmaline Partners