Ashley Watson joined Panmure Liberum as an electronic equity trader following five years at Mirabaud Group. They announced their new role in a social media post. Most recently, Watson served as an equity trader at Mirabaud, responsible for executing equities and ETFs across both high and low touch. Prior to this, London-based Watson spent almost 13 years at Sanford C. Bernstein, also working as an equity trader.

UBS appointed Rhianna Andrew as an execution trader. She announced her appointment in a social media post. Before joining UBS, Andrew spent four years at Citi. Most recently, she served as cash equity trader, assistant vice president – a role she held for two years. Prior to that, Andrew served as a cash equity trader, analyst.

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The move follows Groupama Asset Management and Amundi Intermediation’s strategic partnership, announced in May, which saw the firms merge their trading capacities to enhance trading efficiencies.

Both moved to Amundi on 1 September, The TRADE understands.

The Paris-based traders previously worked under head of the trading desk at Groupama AM, Eric Heleine, and will now report to Christophe Marcilloux, head of fixed income dealing at Amundi Intermédiation. 

Read more: Fireside Friday with… Groupama Asset Management’s Eric Heleine

Elsewhere in her career, Sueng – one of The TRADE’s Rising Stars in 2019 – worked in fixed income sales at both Tullet Prebon and Newedge as well as previously serving in fixed income performance analyst roles at Amundi and Societe Generale Asset Management.

Prior to joining Groupama AM in 2023 as a fixed income trader, Nakache worked in front-office roles at Agence France Trésor and Unibail-Rodamco-Westfield. He has also previously served at firms including Credit Agricole CIB, Beijaflore, and Societe Generale.

The TRADE has also learnt that the transfer of other traders is also planned to take place before the end of this year.

More to follow…

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Following its launch the new desk will act as an intermediary between banks’ capital markets desks and Amundi’s portfolio management teams and is aimed at assisting banks gauge the appetite for upcoming equity issuances, accelerated book buildings and the placement of institutional shares.

Head of European equity research at Amundi, Luc Mouzon, has been appointed to head up the new desk after originally joining the asset manager 12 years ago as an analyst in global technology.

Amundi has made significant inroads into the issuance space in the last few years, particularly following its acquisition of Lyxor Asset Management first announced in April last year. The deal made Amundi the second-largest exchange traded funds (ETFs) issuer in Europe with 13.4% market share.

“In the current market context, it is paramount to be in the position to offer our clients access to Europe’s most dynamic investment opportunities,” said Vincent Mortier, chief investment officer at Amundi.

“I am convinced the Amundi ECM desk will act as a partner of choice for European companies in their IPOs process, and will ultimately contribute to reinforcing the attractiveness of Europe as a financial centre.”

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In a deal first announced in April last year, Amundi acquired Lyxor from French investment bank Société Générale for €825 million, which included Lyxor Asset Management’s passive and active management activities for institutional clients globally, including ETFs and alternative products.

Amundi predicted that the acquisition of Lyxor would help drive the increase of its passive assets under management by 50% by 2025.

This was followed by a recent report from research and consultancy firm ETFGI which found that ETFs and ETPs listed in Europe achieved a new monthly record of $29.06 billion last month, overtaking the previous record of $27.17 billion achieved in December 2020.

According to ETFGI’s January European ETFs and ETPs industry landscape insights report, assets invested in the European ETFs industry dropped by 1.9% from $1.60 trillion at the end of December last year, to $1.57 trillion.

“The S&P 500 decreased by 5.17% in January. Developed markets excluding the US, experienced a loss of 5.33% in January. All countries in developed markets experienced losses, with New Zealand suffering the biggest loss of 14.35%,” said Deborah Fuhr, managing partner, founder and owner of ETFGI.

“Emerging markets decreased by 0.94% during January. Chile (up 12.44%) and Colombia (up 12.36%) gained the most, whilst Russia (down 8.74 %) and Poland (down 4.82%) witnessed the largest declines.”

By the end of January 2022, the European ETFs industry had 2,632 products, with 10,371 listens, asset of $1.57 trillion (the second highest on record), from 88 providers listed on 29 exchanges in 24 countries.

Net inflows of $24.94 billion were reported by equity ETFs/ETPs listed in Europe during January, an increase from $15.92 billion attracted in January 2021.

Fixed income ETFs/ETPs listed in Europe also saw an increase, with net inflows of $2.79 billion during January, an increase from $2.1 billion reported in the same period in 2021.

However, commodity ETFs/ETPs saw a decrease, reporting $1.54 billion in net inflows, lower than the $2.36 billion in net inflows commodities products had gathered in the same time period in 2021.

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The asset manager confirmed it was in talks to purchase Lyxor from  Societe Generale for €825 million in April last year. The deal is expected to close in February.

The firm has predicted that upon completion the addition of Lyxor’s extensive passive and active management strategies for institutional clients globally, in particular in ETFs and alternatives, would help to drive significant growth, with the ETF segment complementing the active business, resulting in around €170 billion assets under management across about 300 products

Amundi said it expected to see a 50% growth of passive assets under management by 2025, with the combined entities passive businesses generating a 14% market share for Amundi. It still has a way to go till it challenges BlackRock though, which held around 50% of the European ETF market at 2020 estimates.

However, Amundi’s anticipated growth in passive income should complement its acceleration of its active liquid alternatives business, where it also expects increased used of its alternative UCITS platform by 50% by 2025.

In light of this, the firm has launched a new dedicated business line for liquid alternatives named Amundi Alternatives, combining Lyxor’s 23-year legacy in this space and Amundi’s distribution network, in anticipation of the deal.

“The Lyxor acquisition is another important step in the deployment of Amundi’s strategy. It elevates Amundi to the 1st position of European ETF providers and enriches our active management offering with a leading position in liquid alternative assets,” said Valérie Baudson, chief executive of Amundi.

“The key managers of these two businesses have been appointed. Amundi is fully prepared to be the reference partner on these areas of expertise for both retail and institutional clients in Europe and in Asia, and thus to pursue its growth in two promising markets.”

With all this expansion on the horizon, the firm might soon be on a hiring spree – its head of UK ETF sales, Samit Patel, departed last November while it also lost Robin Kooijman to HANetf earlier in the year.

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This year, you are scheduled to speak on an all-star panel about systematic trading. What are the key issues on this topic that you are hoping to address in the discussion?

Put very basically, the state-of-the-art technologies and best practices in systematic trading. It’s important we address the issues around best practices that the industry and our peers are facing and ensure we are all heading down the same path. Taking that further, what is the road map going forward and what are the next steps? Which technologies are supposed to be involved in automation?  

Automated workflows have clear benefits for participants as we have seen during the market volatility in 2020. But what risks do they hold?

The risks are held within the benefits and mirror them in many ways. As the workflow is automated, it’s on a no-touch basis and there’s no human intervention. The main element is to make sure that you have all the controls and checks in place to ensure risk doesn’t increase in more volatile periods. This includes hard and soft checks across automated workflows. For me, that’s the most important thing. 

Can automated workflows minimise trading costs and slippage?

When we implemented automation at Amundi, the main purpose was to avoid negatively impacting our execution performance before we thought about adding any value. There’s scrutiny from clients to make sure we don’t adjust execution performance to minimise trading costs and slippage. Adding value and alpha in general, however, will likely be a part of the second phase of the future of automation. We could also potentially onboard more analytics on a pre-trade basis and customise the algorithms we apply in the automation process. 

What role do you see automation playing in the future and are there areas that it could expand into?

I think that it’s going to be a big part of the whole landscape and automating more trading activity is a historical trend we are seeing. This doesn’t mean that automation will replace human beings in the process. It will become part of the must-have tools for trading desks. On the panel at TradeTech, I hope to have a further discussion about how we can demystify automation and realise that it is accessible to many asset managers. 

In the future, the main concern about automation is around the ability to bucket your order flows. Lots of order flows can be automated, but once that first level automation is done, you need more pre-trade analytics and data to design your automation process, especially if you want to make changes, switch to another bucket, or automate more difficult buckets in terms of size and liquidity. With pre-trade analytics, you open the door to more sophisticated data processes like clustering for instance, which allows us to target the right strategies for execution. It’s the huge improvements in technology that allows us to improve the automation process. 

Systematic trading and automation will likely be a hot topic at TradeTech. What other trends do you expect to hear about at the event this year?

There are many connected topics to automation, but that is going to be a central theme at TradeTech this year. The connected topics will be around all the data and the pre-trade data as I mentioned earlier that needs to be automated. 

There’s also a huge focus on transaction cost analysis (TCA) on a post-trade basis because that becomes the justification for automation. Again, it’s important to make sure that automation doesn’t impact execution performance, but ultimately that TCA is feeding the decision process in automation. 

The other topic is around regulation. To some extent regulation is pushing for a more quantitative approach in data and our processes. It’s very likely that we’ll see increasing scrutiny from the regulators about taking a more quantitative approach to these processes.

Which panels are you most looking forward to attending at TradeTech this year?

I’m most interested in best practices around automation and the use of TCA alone and for automation. It seems like regulation has been forgotten over the past few months because MiFID II is far behind us. Now though, we are starting to hear about the new versions of the regulations, like MiFID III. Any new layer of regulations will have an impact on the processes we put in place including automation, so I am keen to attend panels related to that. 

You have attended TradeTech in the past, including virtual versions of the event. Why are events like TradeTech so important for the industry? 

It’s important to raise questions with peers. I won’t pretend to have all the answers to the questions, but it’s a good occasion to make sure that we all share the same concerns and challenges.  

Hopefully, we can get some insights and inputs from the industry and gain an understanding of the state of play to make sure we are not alone in dealing with these concerns. Given the challenges we have faced and the changing market landscape, not only in market structure and regulation but also tools and technology, it’s clearly improving tremendously. Sharing experiences through conferences like TradeTech or through articles, videos or a podcast is an amazing thing. Now more than ever, we need to share our experiences. 

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French investment bank Societe Generale has entered into exclusive talks with Amundi to sell its Lyxor Asset Management business for €825 million as part of an ongoing cost savings strategy.

The deal is expected to be completed by February 2022 and includes Lyxor Asset Management’s passive and active management activities for institutional clients in France and globally, including exchange traded funds (ETFs) and alternative products.

Upon completion, Amundi will become a leading European ETFs group with a combined €142 billion in assets under management and 14% market share. It marks the final major deal for Amundi’s outgoing chief executive officer, Yves Perrier, who is preparing to step down after 10 years.

“The acquisition of Lyxor will accelerate the development of Amundi, as it will reinforce our expertise, namely in ETF and alternative asset management, and allows us to welcome highly recognized teams of people,” Perrier commented. “Finally, by creating in France the European leader in passive asset management, it will contribute to the post-Brexit positioning of the Paris financial centre.” 

For Societe Generale, the transaction will conclude the bank’s refocusing programme, which was launched in 2018. The institution has made sweeping cuts to its investment banking division in a bid to reduce costs by roughly €500 million. 

Societe Generale will create a wealth and investment solutions department to cover the scope of the activities not part of the transaction that will be staffed by Lyxor teams also not included in the deal.

This new division includes structured asset management solutions for global clients and structure savings, asset management and investment solutions for its private and retail banking networks, said Societe Generale.

“It is fully in line with Societe Generale’s strategy in terms of savings products, which is to operate in open architecture and team up with the best asset management experts to build the most suitable offers for our clients,” Frédéric Oudéa, chief executive officer of Societe Generale, commented on the deal.

“Societe Generale and Amundi will remain key partners, each participating mutually in the value proposition implemented for their clients. In addition, this transaction would successfully close the refocusing program launched in 2018 by Societe Generale.”

In November, Societe Generale confirmed its plans to cut more than 600 jobs in France under plans to restructure its credit and equity derivatives structured business. The bank also saw a near-collapse in its equities revenues in the first quarter of 2020, linked to a €200 million loss on structured products due to cancelled dividend payments. 

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Named Amundi Technology, the front-to-back line will offer three cloud-based solutions via Amundi’s portfolio management system ALTO* focused on asset management, private and retail banks, and retirement savings.

The new technology line is expected to become a key growth driver for Amundi, with predicted revenues of €150 million by 2025.

“The Alto range benefits from a unique know-how built over the last ten years. Amundi has developed a 100% open source tool that is one of the most innovative solutions for asset managers and all savings players,” said Guillaume Lesage, chief operating officer at Amundi.

“With the strong capabilities of our 700 R&D professionals, we can guarantee fast and safe project delivery and high quality service over the long term. Amundi Technology aims to be the long-term digital partner for financial institutions.”

The asset manager confirmed that to date, the new solutions have already been deployed to 24 clients across Europe and Asia, including 11 last year.

“Technology is a key point of differentiation and development for financial institutions. Amundi has had strong growth over the last ten years thanks to this firm belief, by continuously investing in talent and infrastructure,” said Yves Perrier, chief executive at Amundi.

“As such, we have committed to creating a dedicated business line for asset managers, institutional investors, and all those within the savings industry.”

Perrier is currently in the process of stepping down from his role as chief executive, after spearheading the asset management firm for the last 10 years.

In February, Amundi confirmed that it had selected its deputy chief executive officer, Valérie Baudson, to replace Perrier when he steps away from the helm on 10 May to take up the role as chairman of the company.

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One of the biggest question marks for Aquis Exchange is whether pan-European share trading will revert to its pre-MiFID I pattern, as looks likely now, or if the actual domiciles of the shareholders of the companies that are listed across Europe will end up being the decisive factor in where trading is ultimately conducted. As we have a UK and a French MTF, Aquis is covered in either scenario but a bifurcation of liquidity is not in the best interests of the end investor.

Also, speaking as the CEO of an IPO market for growth stocks – Aquis Stock Exchange – I am also concerned about the persistent rumours in the UK that the Government is planning on increasing Capital Gains Tax. Such a move will have a very detrimental effort on entrepreneurship and is a massive disincentive for investors in UK PLC – just at the very moment the economy needs small and medium sized businesses to flourish the most.
– Alasdair Haynes, CEO, Aquis Exchange PLC

Markets this year have adapted and developed even greater resilience and the expectation is that markets will continue to evolve, develop and improve. These changes will be driven by regulatory amendments, technological enhancements and greater efficiencies by venues and market participants alike. 

Data and automation opportunities will continue to be critical in both pre trade decision making and the validation of decisions for traders. The continued efforts of firms around diversity and inclusion strategies and engagement will result in the markets being in a far stronger position moving forward and will be additive to future market innovations.
– Simon Steward, head of European equity trading, Capital Group

Acquisition and consolidation of market operators will continue in 2021 as exchanges look to diversify into new products and technology. Cryptocurrencies will extend their popularity as an alternative investment and we anticipate continued significant growth in SIX crypto ETP listings and trading.

Competition in Swiss equity trading will likely return, which SIX welcomes. We anticipate the Swiss Stock Exchange will continue to have the tightest average spreads though these may initially weaken as liquidity providers recalibrate for fragmented markets. The fragmentation of liquidity will likely alter order book dynamics with increased order to trade ratios, orderbook “noise” and greater instances of ghost liquidity. 
– Tony Shaw, executive director, London office, SIX Swiss Exchange

How 2021 will look will depend largely on whether the industry continues with or moves on from the significant developments we saw in 2020: Is there a sustainable new retail interest in the markets, or was the ‘Robinhood Rally’ just the ‘Draft Kings’ gambler looking for an outlet with no sports to bet on during the lockdown?

Three significant new exchanges launched this year; will this lead to more fragmentation, or is this innovation that solves market problems? In block trading (our neck of the woods), independent venues have been acquired by broker-dealers and exchanges. As the lone independent left, we’ll be watching how the buy-side works together with a new regime coming to Washington.
– Jonathan Clark, CEO, Luminex Trading & Analytics

At Amundi Intermédiation, we believe that 2021 will definitely position the outsourced trading as a high potential market in the investment management industry. The disruption emphasised by the recent COVID-19 pandemic are in fact leading many investment managers to re-think their operational models, with particular reference to the internal dealing function.

The impact of rising technology costs, the increased challenge of finding liquidity and the required operational scalability has renewed asset managers’ interest in delegating this function to third parties and accelerated the trend. The benefits of this operational model are now appealing to a much broader range of clients in terms of size and geographical diversification.
– Gianluca Minieri, deputy global head of trading, Amundi Intermédiation

The last few years have taught us to expect the unexpected, but we are hopeful 2021 will begin with a resolution on the UK and EU’s future relationship, providing much needed clarity to the industry. Having been prepared for all Brexit scenarios for some time, our focus will be on ensuring a smooth and orderly transition to the post-Brexit world and, while it may take time for activity to stabilise, we expect to see investors and volume return to Europe’s equity markets with the political uncertainty removed.

We are also hopeful that 2021 will see positive developments on the regulatory front. This includes concrete steps being taken towards the development of a consolidated tape and a sensible approach formulated for the MiFID II review, which keeps alive the principles of venue competition and choice to the benefit of end investors.
– Dave Howson, president, Cboe Europe

The NDF market has been in growth mode for several years, and we expect this trend to continue, if not accelerate in 2021. The maturation of this market can be seen not only in the growth of traded volumes, but also in the increase in pre- and post-trade channels.

Electronification of NDFs has increased, along with the number of venues and trading formats (CLOB, bespoke liquidity on ECNs, etc.). Central clearing of NDFs continues to grow, and that will accelerate with the adoption of Uncleared Margin Rules. And this is before we factor in the boost from macroeconomic conditions.
– Kevin Wolf, CEO, Euronext FX

The impact of COVID-19 triggered record days of trading activity in 2020 across London Stock Exchange Group markets. Dark block trading became truly mainstream in the search for quality liquidity with Turquoise Plato seeing record activity in November and I expect this to continue as the importance of data and the ability to real-time measure performance continues to grow in 2021.

Looking forward, sophisticated interrogation of big data and understanding of the inherent value will be a fundamental theme, especially in a post-Brexit environment where routing behaviour will need to evaluate new venues and re-calibrate quickly. Data science will drive this routing behaviour and product development. Depending on the outcome of ongoing Brexit negotiations, traders may need to navigate fragmentation of liquidity across Europe and the risk of regulatory divergence.
– Scott Bradley, head of sales and global business development, LSE cash secondary markets and Turquoise, London Stock Exchange Group

Post-COVID (around mid-2021), the adoption of technology forced upon us by trading remotely and working from home will take a breather. Humans are creatures of habit, and in the post-pandemic, I believe they will fall back into the ‘old ways’ of doing things quite quickly. The technology is here and readily available and it will be adopted, but at a far-slower pace than perhaps people think.

Elsewhere in 2021, the buy-side will continue to increase their use of electronic trading methods, with suppliers offering more and more sophisticated means to do so. Smart request for quotes (RFQ), synthetic central limit order books, dark pools, program (list) trading will also increase.

Best execution analysis will be used to better assess and evidence best execution within fixed income, while equity-style transaction cost analysis (TCA) will be discarded as being not fit for purpose… finally. Finally, automated trading will become an even bigger trend as the underlying technology and decision engines get smarter, and the buy-side is increasingly comfortable with the concept.
– Carl James, global head of fixed income trading, Pictet Asset Management

If 2020 has taught anything, it’s to expect the unexpected. This will continue to apply as we head towards 2021. Technologically advanced firms have emerged as leaders in the shift to working from home, and, as we’ve all settled into a hybrid working environment with an increased proportion of time spent working remotely, I expect technology to continue to act as a key differentiator in 2021.

Buy-side firms that have invested in smart tools, using AI and machine learning to access research and process data, may be best positioned to make more informed trading decisions, potentially leading to enhanced performance. This proved critical at a time when high volatility resulted in a dramatic increase in the cost of trading earlier this year.
– Mark Pumfrey, global head of equities, Liquidnet

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