OTR Global Tradingopened a new research sales and trading desk in the heart of Boston’s financial center, to expand its coverage of institutional asset managers through a focus on research and high touch execution services.
The research-driven agency brokerage firm, which is part of the same company that owns OTR Global, an alternative research firm, supplying primary intelligence and channel checking to institutional investors, is ramping up its presence in Boston where it already had a research sales capability.
The agency brokerage firm now has two traders on the Boston desk, as well as eight traders on its existing desk in Purchase, New York.
“The key of what we’re doing on the trading side, is to match the research focus of the firm and provide clients with timely high-touch services from an agency desk,” said Dave Ambrose, director of trading at OTR Global Trading in an interview with Advanced Trading.
Ambrose said he's seen a return to high-touch trading. “The reality is that everyone went from high touch services to the machine world of VWAPs and algorithmic trading, and now you’re got this combination of some people using algo trading and others wanting high touch,” said Ambrose.
The logical place for OTR Global Trading to expand was Boston, said Ambrose, noting that it’s the second biggest marketplace in the US, and also because OTR has a strong customer base there. “The key was to get a couple of traders in that town that understood what the customers need and how to service them,” said Ambrose, who noted it would have been hard to cover Boston from Purchase.
The two new hires in Boston are Christopher Horan who joined OTR Global Trading from hedge fund Echobridge Capital, where he served as a senior analyst, and Graham Morrrell, a former institutional equity trader at Canaccord Adams, responsible for financial, REITs and lodging sectors. Both traders have experience on the buy side at hedge funds and mutual funds. Previously, Horan was an equity trader with Fidelity Investments where he also held a research position with the high yield group. Morrell previously worked for Balayasny Asset Management where he traded international, financial and healthcare equities, and with Fidelity Investments where he traded equities across a variety of sectors.
“They have buy side experience and they understand what was a good sales trader and makes their lives easier,” says Ambrose. In addition, Dominic Lamanuzzi, an institutional sales representative originally from Boston, will relocate from the New York office to work with Brian Coakley and Mike Hanley in covering the Boston institutional investment community.
With tighter commission budgets everywhere on the buy-side, OTR Global Trading is responding to the client’s need for value-added research products. “If you’re providing a value-added product, a research product, a timely call on options, all these things get done through the trading desk,” he said.
In the morning, for instance, portfolio managers and analysts are inundated with calls and emails, so they don’t have time to have direct conversations with the sell-side, related Ambrose. “I think the one place you can get someone’s attention is on the trading desk,” said Ambrose, adding it can be quicker to get the trading desk on the phone than an analyst.
In addition to providing access to OTR”s research, the agency trading desk provides market color on executions, and adds value on options volatility or volume extremes.
While OTR Global Trading has algorithms from all the biggest players on the desk, including Credit Suisse, Goldman Sachs and Knight, it also has its own proprietary technology that screens options across the universe. “We know the customers’ portfolios, whether it’s options volatility or volume search, you can alert them if something is up,” said Ambrose.
OTR Global’s agency desk evolved from OTA, a mathematically based trading firm that did statistical arbitrage and correlated trading. In the mid 1990s, OTA set up a relationship with Off-The-Record, the alternative research firm, and they merged in 1995. Now OTR Global Trading is a separate agency trading desk. In January, Liquidnet completed an investment in OTR Global Holdings II, Inc., the parent company of research firm OTR Global. OTR Global is helping Liquidnet to run conferences, but this has had no impact on the trading or research side, said Ambrose.
“Everyone has a different niche. Our niche is our independent product, the research and the trading desk. That’s the key to add value to our buy side clients,” said Ambrose.