AllianceBernstein To Execute Bond Trades Of Buy-Side Firms
Zacks Investment Research | Feb 04, 2020 10:14PM ET
AllianceBernstein Holding L.P. (NYSE:AB) , through a new outsourcing service, will execute the bond trades of other buy-side firms. The move was announced by James Switzer, global head of the company’s fixed-income trading. Per Bloomberg, the investment manager is looking for mediums to profit from the expertise and size of its trading desk.
Switzer mentioned that AllianceBernstein receives the highest level of quality pricing in trading on account of its size and technological knowledge. The firm is now ready to pass on this advantage to clients through outsourcing.
AllianceBernstein has already introduced a robot, which will help it execute bond trades directly with bots at dealer counterparties.
The motive behind designing the robot is to save time of traders and, in turn, beat competition.
Though the service is in its early days, AllianceBernstein has started to buy and sell derivatives for an insurance client through its trading desk in New York.
Switzer stated, “It’s hard for asset managers to innovate and create new technology while downsizing. You either build it or buy it -- either way, you’re spending money and we’ve already got the systems in place.”
Offering outsourced fixed-income trading has not yet been so common within the United States. In fact, AllianceBernstein is one of the few initial firms that have been chosen to beta-test this new technology.
Till now, equity markets have outdone their fixed-income counterparts in digitizing operations, including outsourced trading.
Firms like AllianceBernstein have been continuously investing in technology, which enables them to handle market developments. Most money managers are trying to cut costs as they are under pressure to reduce fees. Hence, most of these firms prefer to get their trading work outsourced. AllianceBernstein is seeking to profit from this arrangement by offering outsourced trading to buy-side firms.
Notably, the probable users of this service will likely be smaller asset managers, hedge funds and larger firms that want to cut costs.
In the past year, shares of AllianceBernstein have rallied 13.2%, outperforming the Zacks Investment Research
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