Cowen Ramps Up Investment in Fixed Income Technology

The fixed income world has generally been a laggard compared to the technology advancements of the equity and derivatives markets, said Andrew Rae-Moore, Co-Head of Prime Brokerage Europe, Cowen.

Andrew Rae-Moore

“We see this changing and are making significant investments in our infrastructure to mirror more closely our equity capabilities,” he told Traders Magazine.

This will include increased automation from the fixed income trading process through to the back end and will bring significant benefits in terms of speed and efficiency, he said.

“We are also planning to launch a mobile app so that clients can easily access and manage their portfolios when on the move or away from the office,” he added.

According to Rae-Moore, Cowen’s focus is on delivering value, expertise and exceptional service to hedge funds of all sizes – and to do this the firm regularly evaluates their resources to ensure that they are allocated appropriately, and that they are working with the right technology partners as the business and client requirements evolve. 

“We look at trends in terms of client strategies and adjust our needs appropriately,” he said. 

“Whilst we typically plan 2-3 years ahead, we are also agile enough to be able to react quickly to market changes, ensuring we have the right resources in place at any given time,” he added.

Rae-Moore explained that as a mid-tier firm, Cowen has the advantage of being very nimble in terms of onboarding new technology, ensuring that their clients reap the benefits of accessing the latest technological developments in the industry. 

“We typically work with best of breed technology providers, bring them on board as partners and invest in tailoring their systems to our specific requirements. We are thoughtful in our use of off the shelf technology versus building in-house for our needs,” he added.

According to Rae-Moore, clients of varying size and strategy will have very different technology budgets and requirements. 

Given limited personnel and time at the start of a hedge fund’s journey they will have little bandwidth to explore the right technology for their business, he said.

“Get it wrong at the start and you face a painful, often expensive and time consuming task switching providers at a later stage when you will want to focus on running your strategy,” he stressed.

“We are able to advise hedge funds on which technology best suits their current strategy and future needs as a key part of the service we provide,” he added.

He said that Cowen is a sophisticated Prime Broker and is aware of the full functionality of most technology solutions in the market, either through their own experience or from feedback from their large client base of hedge funds. 

“Over the years, our team has had experience with many different systems and therefore we are ideally placed to provide insight to clients about the advantages and disadvantages of each,” he said.

“We have a very strong overview of the best of breed technology vendors for this segment of the market,” he added.

Cowen’s Prime Broker service thrived in 2021, according to Rae-Moore.

“We selectively gained clients from the fall out, invested in growing our team, evolved our technology and maintained high client retention levels. In addition, our Capital Introduction service, which is part of our Prime Brokerage solution, went from strength to strength, providing added value to clients,” he concluded.