TradeShare History

Subsequent to the release of the Myners report and the lack of reaction within the UK pensions industry regarding proactive cost monitoring, TradeShare began to study and explore the transaction cost market.

We found feedback from those pension schemes that had been early adaptors of TCA to be overwhelmingly pessimistic and it was obvious that improvements were needed in the following areas:

• The services were expensive, averaging £15,000 annually.
• TCA reports were too complex and investors found them difficult to interpret.
• Dialogue with external asset managers often contradicted findings, meaning the TCA exercises had been a waste of time and money.
• The acceptance of VWAP as both a trading strategy and a transaction-price benchmark means that many TCA services measures outcomes on a relative basis.

TradeShare also conducted intensive dialogue with numerous representatives from leading management companies and found the following:

• Asset managers are very keen to rectify any identification of poor execution but lacked a method for comparison against peers.
• Asset managers are unhappy with the analytical rigour most TCA services offer. 
• Few, if any, TCA suppliers collected detailed information covering the timing of transaction decision-making (without these parameters, TCA is merely a broad estimate, not a true or exact calculation).

TradeShare’s approach therefore had to be different from the start. Our products had to provide the investors with an easy-to-use, cost efficient reporting tools while the asset managers required in-depth data collection involving time stamps, which in turn would allow them to accurately analyse costs.

Over a two-year development process, involving 70 individual UK pension schemes, 40 asset managers and 560,000 global equity transactions, TradeShare designed, built and brought to market an enhanced cost measurement tool that goes much further than mere measurement and compliance. In combining Transaction Costs Measurement with add value services users can now have at their fingertips ultimate transparency of their trading activity. 

TradeShare represents the definitive combination of what any institutional investor would desire if they were actively pursuing the reduction of costs for the benefit of increasing returns.