TP ICAP NEWS DRIVERS
So, the drivers of buy-side and sell-side trader behaviour are not the same. The regulatory influences and constraints are also different. I think buy-side-to-buy-side trading will grow over time, but we have to remember that the bank business model is different from asset management. “The electronic market will continue to evolve and grow. Regulatory interventions such as the Volcker Rule has also forced dealers to wind down the balance sheets that they were willing to put to work in the credit market, sparking more electronic trading and the rise of the buy-side price maker. The credit market is more fragmented and complex than equities given there is no exchange traded reference price. While Liquidnet is yet to unveil a portfolio trading solution and demand from the buy-side for more ‘full-service’ brokers continues to increase, TP ICAP has the chance to capture a percentage of business by developing new tools and protocols through Liquidnet. Major platforms like Tradeweb and MarketAxess have been quick to cater for evolving execution trends, developing new tools for portfolio trading, for example, which is now a major part of the market. Liquidnet’s blotter sync technology, which provides a unique level of insight into the order lifecycle and trader blotters, is also a key differentiator.Īlthough Liquidnet has managed to cement itself in the more competitive dark space for equities, TP ICAP has the chance to burst into the credit market, which has typically been dominated by three incumbent platforms.
It is one of the largest pools of buy-side corporate bond liquidity, boasting average trade sizes that are between five and 10 times higher than other platforms and buy-side daily liquidity of around $13 billion. Over 500 buy-side clients access Liquidnet’s fixed income liquidity pool for client-to-client trading. We now want to use our close relationships with the dealers to provide further liquidity sources to that ecosystem and give users have a wider range of transaction options.” “Building that level of connectivity organically would have taken us many years, and we would have risked missing out on some of the market opportunities that we are so excited about. “When we first started looking at Liquidnet, it was clear that they had already done a lot of the hard work in terms of onboarding major global asset managers for credit, and getting the required OMS/EMS connectivity, which addresses the major barrier to entry – a connected network of participants,” Nader says.
TP ICAP NEWS DRIVER
Liquidnet’s network of more than 1,000 buy-side clients, who collectively manage $33 trillion of assets in equities and fixed income, was a key driver in TP ICAP’s decision to acquire the platform. Group head of strategy, Joanna Nader, tells The TRADE that TP ICAP’s strategy for its agency execution business has been to diversify its client base on the buy-side after focusing primarily on the hedge fund community.
The deal opens a door for TP ICAP to expand into equities with Liquidnet’s origins in client-to-client dark block trading, but it also provides buy-side connectivity in the credit market which, if married effectively with TP ICAP’s dealer relationships and liquidity, could prove disruptive for incumbent platforms MarketAxess, Tradeweb and Bloomberg. Much like Liquidnet, the broker also operates multiple trading venues around the world but with a focus on commodities and interest rate derivatives. Liquidnet presents a significant opportunity for TP ICAP.
TP ICAP NEWS FULL
With the acquisition having been completed in March, TP ICAP now has its hands full as the integration of the platform begins steadfast. Joanna Nader, group head of strategy, TP ICAPĪs rumours persisted that trading network and venue operator Liquidnet was up for sale, it came as no surprise when interdealer broker TP ICAP confirmed plans to acquire the company for $700 million in September.
0 kommentar(er)
