State Street Corporation has entered into a definitive agreement to acquire CF Global Trading, a global firm specialising in outsourced trading on an agency basis for a variety of asset classes including equities, listed derivatives and fixed income.
The transaction is expected to be completed by the end of 2023, subject to customary closing conditions. Financial terms are not being disclosed. The deal follows the recent completion of Toronto Dominion’s acquisition of Cowen Group, which also provides outsourced trading services, and the closure of outsourced trading provider Sherpa Edge.
CF Global Trading has expertise across multiple asset classes and will have execution desks in Hong Kong, London, New York and Lisbon, expected to be opened by the time of the close of this acquisition, and this deal will expand State Street’s current outsourced trading, with the firm proposing its clients can expect the ability to provide outsourced trading services to new clients and markets. The combination of the two firms will allow State Street to offer its trading solution, part of the firm’s State Street Alpha front-to-back platform, to Europe and the UK, where it previously lacked outsourced trading support.
“Market volatility, margin compression, increased regulation and cost pressures have presented multiple challenges for investment managers. Survival and growth depend on the ability to streamline processes, reduce costs and integrate infrastructure to allow more focus on core competencies of investment selection and alpha generation,” said Dan Morgan, global head of Portfolio Solutions at State Street. “With the addition of CF Global Trading, we add scale and significant expertise to our outsourced trading services that will complement and help further bolster our current offerings.”
State Street has provided clients with outsourced trading solutions since 2010, but currently only provides outsourced trading to clients in the Americas, APAC and Middle East, and CF Global Trading will extend the ability for the firm to provide these services to clients in the UK and the EU, where State Street reports that outsourced trading is maturing the fastest. After closing, the new combined State Street footprint for outsourced trading will include trading desks in Boston, New York, Toronto, London, Lisbon, Hong Kong and Sydney.
“This is a very exciting day for all of us at CF Global Trading,” said Scott Chace, co-founder and CEO of CF Global Trading. “Our team has worked with our clients for 20+ years to develop a global, multi asset class execution platform with a focus on accessing liquidity, improving workflows and reducing costs. We look forward to joining the State Street team and continuing to build on our client platform and experience with the scale of one of the world’s largest institutional financial services providers.”
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