A month after its head of trading quit, Liontrust has outsourced its entire trading operation to BNY, citing the need for technology and automation.
Investment fund and institutional accounts for the active asset management firm, which holds £21.6 billion in assets under management and advice (AuMA), will now be traded by the BNY buy-side trading solutions division. Liontrust’s UK-based traders are joining the team.
John Ions, Liontrust CEO, commented: “Trading for asset managers has changed significantly over the past few years with the increasing use of automation and technological developments. While this presents opportunities for greater efficiency and returns, it also requires careful management of the associated risks and a significant investment in technology to compete. Our collaboration with BNY will enable Liontrust to achieve this.”
Despite attempts to recover from a 28% decline in profits in H1 2024, according to its most recent trading update Liontrust’s AuMA fell by 8.1% year-on-year to end-March. Net outflows increased from £1.2 billion to £1.3 billion.
READ MORE: Liontrust pivots strategy as profits drop
In the update, Ions said: “Our focus remains on what is within our control. We continue to develop the business and are confident we have been making the right changes to ensure it is in the best possible shape for the future.”
The firm also lost its head of trading last month.
READ MORE: Liontrust loses McLoughlin
Liontrust has been chasing international expansion in recent years, building out its presence with appointments in Switzerland, the Middle East and Asia in 2025. Close to half of its investments and trading now take place outside of the UK. It expects the partnership with BNY to enhance its international provisions.
“BNY has extensive global trading capabilities that will provide sophisticated execution, operational efficiency and economies of scale for Liontrust and our clients,” Ions noted.
Outsourced trading has increased in popularity over recent years, thanks to its time- and cost-saving capabilities. However, a number of market participants warn that value may be lost if firms opt for outsourcing. As one equity COO told Global Trading earlier this year: “There are certain advantages to having an internal trader that are difficult to achieve without them.”
READ MORE: Outsourced trading: What the buy side really thinks
