Wedge Partners, a technology research boutique, has decided to outsource its trading to Rosenblatt Securities. The move will save money for Wedge, which previously had its own trading desk, as well as offer clients additional execution capabilities such as algorithms, options trading or sponsored DMA.
Wedge is a fifteen-person boutique based in Denver. Wedge’s research methodology is based primarily on gathering and analyzing channel trends for the technology sector through a network of industry contacts. The firm has 5 research analysts, including founder Kirk Adams.
Wedge Partners has an affiliated broker-dealer, Wedge Securities, and an all employees of Wedge are registered. Previously, Wedge maintained its own trading desk for clients who wished to pay for its research through direct trades. Under the arrangement with Rosenblatt, the three traders on Wedge’s trading desk will be dual-registered representatives with both Wedge and Rosenblatt and execute trades solely at Rosenblatt. Head trader William Walters and traders Ryan Smith and Justin Weil continue to be carried on Wedge’s books. Two other traders were let go.
In addition to the savings on the traders, Wedge will no longer pay trading infrastructure costs. Rosenblatt will supply the trading technology and back office and compliance for the trading related activities. Wedge Partners will maintain its own compliance officer for its remaining operations.
Wedge will also continue to maintain 5 institutional salespeople, who will service existing accounts. Rosenblatt has its own research sales staff which will offer Wedge research to Rosenblatt’s clients.
Rosenblatt Securities is well known for its market structure analysis and its market structure conferences are well attended by buy side traders. It has recently been expanding its research offerings, like many other agency brokers who seek greater commission flow in a shrinking commission environment.
Last year Rosenblatt added an analyst to cover exchanges and other market-structure-related companies, a natural extension to its existing market structure analysis. When WJB Capital folded last January, Rosenblatt hired WJB’s market strategist, Brian Reynolds. Concurrent with its deal with Wedge, it announced it was hiring an energy analyst to cover stocks, primarily in the exploration and production sector.
The joint press release can be found at http://www.rblt.com/uploads/documents/news/Wedge-Rosenblatt%20Release_FINAL.pdf.