This year, The TRADE is proud to be celebrating its twentieth anniversary and to mark the momentous occasion we are excited to be launching the first North American iteration of our famous Leaders in Trading awards. 

The shortlists for the Leaders in Trading New York Buy-Side Awards have been produced following a slew of nominations from key industry players across North America, recognising whom amongst their peers stand out as the most deserving of these recognitions. 

Congratulations to all those nominated across the five categories! The winners will be announced at the Leaders in Trading New York glittering awards night to be held at Chelsea Piers in New York City on 19 November.

“The Buy-Side Awards are the highlight of Leaders in Trading,” said The TRADE’s editor Annabel Smith. “We couldn’t be more excited to be bringing the magic of Leaders in Trading over to the US for the first time in The TRADE’s 20-year history.” 

The categories for the Buy-Side Awards include the coveted Trader of the Year – Long Only, Trader of the Year – Hedge Fund,  the Trading Desk of the Year Awards, and Buy-Side Market Structure Expert of the Year. 

Also set to be recognised on the night are this year’s Rising Stars of Trading and Execution, North America – to be announced in due course. 

Many congratulations to all the shortlisted individuals and teams, it will be a night to remember! 

Trader of the Year – Long Only 

Megan Davidson, BlackRock

Chris Fiorito, River Road Asset Management

Stephanie Fraser, Baillie Gifford 

Jay Peters, Artisan Partners 

Jason Siegendorf, Harris Associates

Trader of the Year – Hedge Fund

David Alfred, Conversant Capital

Adam Nemser, Southpoint Capital

Keith Roscoe, Jericho Capital Asset Management

Craig Tscherne, Verition Fund Management

Renato Zimberknopf, Fourth Sail Capital

Trading Desk of the Year

Balyasny Asset Management 

BlackRock 

Millennium

Thompson, Siegel & Walmsley LLC

Wellington Management  

Fixed Income Trading Desk of the Year 

Invesco

Janus Henderson

Legal & General Investment Management (LGIM)

PIMCO 

T. Rowe Price

Buy-Side Market Structure Expert of the Year

Simon Cohen, Morgan Stanley Investment Management

Dan Eisemann, MFS Investment Management

Melissa Hinmon, Glenmede Investment Management

Mett Kinack, T. Rowe Price

Ed McBride, Centiva Management

Key contacts at The TRADE 

Please contact Patrick Wright at patrick.wright@thetradenews.com for sponsorship opportunities or to book a table for Leaders in Trading New York.

If you are a member of the buy-side community and would like information on attending please contact Karen Delahoy at karen.delahoy@thetradenews.com or Annabel Smith at annabel.smith@thetradenews.com.

The post Leaders in Trading New York 2024: Buy-side shortlists revealed appeared first on The TRADE.

Algorithms, especially when developed and managed internally, can significantly enhance the front-office tech stack. They reduce costs, lower market impact, and increase execution transparency. While the primary perception is that algorithms help investors execute orders efficiently, there’s much more to it.

For instance, the additional data collected by algorithms offers endless possibilities. Storing order book updates received at millisecond intervals in a well-designed database enables high-level back testing. Additional data also provides accurate transaction cost analysis (TCA) and supports various data science and possible AI-driven applications to improve strategies and execution. 

Moreover, algorithms help better understand the market, providing investment managers with valuable information to make more informed decisions. Placing quants directly at the desk creates a high-performance, hybrid workspace that significantly speeds up implementation and optimisation. This setup ensures that both quants and investment managers learn from each other, potentially creating a new and more capable type of quantitative investment manager. 

Finally, using algorithms makes your organisation more attractive to top quants in the labour market. Talented young professionals are eager to work on challenging data and tech projects where they can develop their own innovative ideas.

Are in-house algorithmic execution platforms the way forward?

When I look at the current state of the market and see all the developments taking place, I believe this will be the way forward. In recent years, the possibilities for developing your own applications have increased enormously. Combined with the rise in tech-savvy talent, this creates the perfect environment for companies in the sector to develop their own in-house execution platforms.

Having the ability to manage, optimise, and implement your own algorithms allows organisations to retain all associated knowledge internally. This not only provides a significant advantage over peers but also prepares your organisation for the rapidly evolving digital future. An execution platform also grants direct market access to several liquidity providers. With the newly unlocked data from the execution platform, it becomes easy to determine where and with whom to execute transactions. Adding new trading venues or banks is quicker and more efficient compared to traditional methods.

Additionally, your organisation can respond swiftly to new market developments to stay ahead. Creating an in-house execution platform also enables you to establish a high-standard risk management and governance framework tailored to your organisation’s needs.

All in all, there are ample reasons and movements within the market to encourage this trend.

How can technology be leveraged in a way that allows traders to execute the same procedures for all FX instruments?

There are numerous ways and opportunities to leverage the vast pool of available technological applications to achieve this. Therefore, there isn’t a single, clear-cut answer to this question. Previously, there was a trend where many technological solutions were purchased by organisations due to a lack of skills and manpower to build them internally. Nowadays, more organisations employ talented and well-qualified individuals who can develop these solutions in-house.

This doesn’t mean that everyone in the sector is building their own applications and tools for all FX instruments. However, there is a noticeable trend of organisations starting to create their own direct market access and/or TCA tools, which shows promise for potentially serving all FX instruments and also the non-FX instruments.

The market still needs to take some steps to make this possible. For example, in the FX Swap market, we are seeing initial moves where parties are providing streaming prices, which could enable the buy-side to develop in-house algorithms for FX Swaps.

For now, technology can be leveraged mainly in the pre- and post-trade procedures to execute the same processes for all FX instruments. Post-trade data for all FX instruments is already widely available, if not already stored by your organisation. This data can be used to create in-house TCA tools or back testing engines for all FX instruments, helping to improve execution.

In short, the possibilities are endless, and it is up to your organisation to determine how to best utilise them.

What are the main barriers when it comes to reaching this goal?

First of all, the technology must be made available to your employees and easily accessible for them to work with. This involves addressing several risk management, security and architectural challenges. Therefore, having a reliable IT partner with a high service level is crucial. Once your IT landscape is in good order and set up according to the highest market standards, you need talented and well-equipped personnel. Fortunately, there has been an increase in tech talent interested in the financial sector, so this should not be too big of an issue.

A bigger challenge might be obtaining internal approvals and managing your in-house developed procedures, applications, and tools for all FX instruments. While creating and testing these technological improvements can be done quickly and easily, getting the business to actually start using them can be more difficult. This means you need to establish a robust and widely supported risk management and governance framework in collaboration with your internal risk management department.

The post In-house algorithmic execution platforms are the way forward appeared first on The TRADE.

The active investment house with $33 billion offers a range of funds that invest in the UK, Europe, the US and around the world, and selected Northern Trust for a range of asset services earlier this year.

Speaking to The TRADE, Sheenagh Dougall, chief operating officer, Artemis, said: “What ultimately informed the decision was what this could do for our clients and how it could enhance their returns.

“Our centralised dealing desk has done a fantastic job for our business and for our clients, but I think we recognise some of the limitations of having a dealing desk in-house in a firm of Artemis’s size where we can’t do that follow the sun method. We are based in the UK, but we have funds that operate in the US and in emerging market space and, potentially, could we do better in those areas and have better coverage?”

Northern Trust will support all trading activity for Artemis’ equity funds under management and all related over-the-counter and exchange-traded derivatives. The appointment follows a review by Artemis of its operating model intended to help align its operational structure with its strategic growth plans.

Four members of Artemis’ dealing team will move to Northern Trust.

Mark Murray, senior partner at Artemis, said: “Outsourcing our equity and derivatives trading to Northern Trust ensures our continued access to global markets, whilst delivering high-quality liquidity and operational scale, further expanding the partnership and strong cultural fit between our organisations.

“We are confident this extension of service delivers the capabilities and operational resilience we require – supporting our focus on providing outstanding returns and service for our investors, as well as our ambitious plans for the continued growth of our business.”

Northern Trust is on an unprecedented run of securing outsourced trading mandates over the past 12 months, signing deals with True Potential, Waverton Investment Management, 2Xideas and Nedgroup. A major mandate was also secured with Rathbones in April 2023.

“We are excited to be partnering further with Artemis to support their end-to-end requirements for global equities and derivatives trading,” said Glenn Poulter, global head of brokerage at Northern Trust.

“The mandate supports Artemis’ focus on growth and complements our existing relationship: driving efficiencies through our global technology architecture, straight-through-processing and an integrated service proposition – from execution to custody – that now supports the complete lifecycle of its investments.”

The post Artemis Investment Management outsources equities and derivatives trading to Northern Trust appeared first on The TRADE.

His departure comes in the wake of the new Groupama-Amundi partnership – which he has led for the last two years.

Heleine is not set to join the new offering, and instead will be moving on to embrace a new challenge according to sources familiar with the matter.

Read more: Groupama and Amundi team up to boost trading

Groupama Asset Management and Amundi Intermediation’s strategic partnership, announced in May 2024, saw the firms merge their trading capacities to enhance trading efficiencies.

Speaking at the time, Heleine explained: “With Amundi Intermediation, we share the conviction that execution is changing radically with rapid and global digitalisation. 

“[…] By making the most of advances in AI and data science, Groupama Asset Management and Amundi Intermediation aspire to define new standards of excellence in transaction execution, while strengthening the teams’ ability to respond quickly and precisely to market challenges.” 

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

Heleine had been with Groupama AM for 15 and a half years and has also previously worked in other buy-side roles at firms including BGC Partners and Etoile Gestion.

The post Heleine set to depart Groupama AM appeared first on The TRADE.

The post Gallery: The TRADE’s Rising Stars of Trading and Execution 2024 appeared first on The TRADE.

We consider a variety of factors, but pricing quality is first and foremost and cannot be overlooked. Under this idea is a multitude of factors including a constant assessment of bid ask spreads, counting rejects in terms of both absence of pricing and trade rejection, historical performance in terms of currency, size of trades, and importantly, the measure of bank availability in ‘crisis’ i.e. how reliable our liquidity providers are in difficult trading times. When the market is functioning well, spreads are tidy, liquidity is abundant, and quality pricing is easier to find. In those 5% of times when the market is under stress, that’s when we need to know where to look.

Fill ratios and hit rates are also important factors when considering bank performance.

How do you structure your panels?

Our process for LP selection is dynamic, meaning we can adjust our LP panels easily and there is no real lag between analysis and panel adjustment. This flexibility helps us respond quickly to changes and to maintain trading efficiency. We can segment our flow into specific currency buckets based on several characteristics such as currency, groups of currencies, and size. We then decide what tier the trade or groups of trades fit into in terms of difficulty.

Underneath this, we also consider market conditions or the desired outcome for a particular trade. While we have an idea for the number of banks a trade would ideally have, we don’t believe that throwing as many LPs as possible into an aggregator will allow us to achieve an efficient spread.  I think the market now agrees too.

How can you move into the position of ‘preferred customer’ and what benefits can this bring?

We see our relationships with our liquidity providers as partnerships, and we take a strategic approach that emphasises mutual value and long-term partnership. We don’t want or expect our LPs to be the best at everything. We value transparent communication – if you aren’t going to be efficient with GBPUSD but you are going to add value somewhere else, then let’s have a conversation and we can structure our panel accordingly.

As I’ve mentioned before, we place a lot of value on reliability and consistency in both good and bad times. All of this helps to create a more efficient environment. Moreover, the benefit of this mutual understanding is that it fosters the creation of long-term successful relationships and a well-functioning market.

How do you leverage bank relationships to get the best pricing?

We use a combination of engagement and transparent communication to leverage bank relationships to obtain quality pricing. When you reach a point in the relationship where you have regular dialogue, consistent trading volume, and productive use of technology in terms of analytics and execution, then you have a good base for building lasting relationships that support your competitiveness in the market.

The post Dynamic panel structuring is key to maintaining trading efficiency appeared first on The TRADE.

Over the past decade, technological advancements and increasing financial regulations have been the primary drivers behind the evolution of trading analytics and transaction cost analysis (TCA). 

These components are the backbone of the PGGM trading analytics desk. Our mission is to optimise the transaction chain, provide comprehensive insights into trading processes and order flows within financial markets, and ensure accountability in order execution. We firmly believe that measurable insights from transaction data enhance both understanding and control over the trading process, leading to more efficient order execution and improved outcomes for our client. 

Initially, we focused on best execution reporting to comply with Mifid II requirements. However, we have evolved into leveraging data-driven TCA processes and are currently building a multi-asset data platform. This platform aims to offer our clients deeper insights into the efficiency and cost-effectiveness of their trades, provide a complete feedback loop (including pre- and post-trade analysis), and support the decision-making process for portfolio managers. 

What are the pros and cons of building in-house versus using a third-party provider? 

Using a third-party provider often results in solutions that are designed to meet the needs of the average user. In contrast, developing in-house allows us to customise every feature specifically to our business requirements. This approach enables us to combine and utilise information from multiple data sources without the constraints often imposed by external vendors. By integrating this data into a comprehensive platform, we can generate insights that would be unattainable from a single source, yielding more detailed information on brokers, algorithms, and trading venues. These insights can then be transformed into actionable business intelligence, providing us with a robust dataset for our models. 

However, a significant drawback of our in-house approach is the difficulty in benchmarking our performance against industry peers. Many TCA data vendors offer anonymised peer comparisons, which can be valuable. Given that our trade execution processes are highly customised, the value of such peer comparisons is limited. Therefore, we are exploring alternative benchmarking methods to compare our trades. 

How can TCA use be further optimised/automated on the trading desk? 

Our desk has reached a level of maturity that allows us to meet all reporting and regulatory requirements. In addition, we provide traders and portfolio managers with easy access to their trading data, offering them a realistic view of their performance, beyond standard metrics like turnover.

We are now shifting from merely monitoring to actively optimising, starting with equities and fixed income, and extending to FX next year. 

This transition includes providing explicit pre-trade insights and integrated trade signals, ensuring that portfolio managers and traders have all the relevant information at the time of decision-making. With these insights, we can further specialise our trading strategies and in the future probably automate more standardised trades. Additionally, we are exploring the development of in-house trading algorithms tailored specifically to our trading needs.

The post Achieving TCA maturity on the trading desk appeared first on The TRADE.

At the helm of the team is global head of trading Cathy Gibson who oversees trading across the asset manager’s offices in London, the US, Asia Pacific and South Africa. Gibson is a seasoned trader with an extensive career in markets. She joined Ninety One in 2021 from Royal London Asset Management where she had been head of dealing for three years. 

Previously in her career, she spent two and a half years as head of fixed income trading for UK asset management at Deutsche Asset Management [now DWS] and nearly five years at Pioneer Investments as a senior fixed income dealer. She began her career with a two-year stint as a principal dealer at Bank of Ireland Global Markets. 

In her more recent roles however, Gibson has stepped away from the markets and instead refocused her attentions on leading and developing her global team. Having a cohesive team globally has proved an increasingly essential tool for institutions in light of the ongoing globalisation of finance and the turbulence caused by market events in the last few years. 

Varied approaches to the Covid-19 pandemic starting in 2020 paired with the subsequently varied approaches central banks have taken to abate the economic fallout has left traders, in particular those in the emerging and frontier fixed income space, more reliant on their relationships than ever, both internally and externally. 

“Markets have been tricky. Show me a time when they haven’t,” asserts Gibson. “Markets are constantly challenging and that’s the key aspect to our role.”

For Gibson, the key to an effective team is autonomy and each individual trader feeling a sense of ownership to their day-to-day activities. 

“When people have ownership in their function and they can see their contribution to the business, that really motivates them to make sure that they are constantly improving,” she explains. “In general, my experience is that people don’t like change being done on to them, but they have no problem being part of it and driving it.”

Ninety One’s trading team consists of 17 globally with six – soon to be seven – based in London. The firm also has trading hubs in New York, Hong Kong and Cape Town. Given the wide breadth of products that they cover, the team leverage each other day-to-day to understand how the markets are ticking over. 

“When we see an inflow and notice that some of that cash has been deployed in Asian markets earlier in the day, it gives us insight into market liquidity,” says trader Ed Wood. “There’s often a connection between the markets they trade and those we handle here in London. This can provide valuable perspective, such as when duration is heavily bid, it might mean certain bonds are difficult to source for us.” 

Wood joined Ninety One in 2021 after serving for a year and a half at Aviva Investors as a credit trader and for five years at Vanguard as a fixed income trader. Wood now trades the credit side of things at Ninety One across regions and also supports the local rates and FX traders on the desk. 

For him, it is the correlation between real world events and the markets that drew him to his role in finance in the first place. The changing stance of the US Federal Reserve when it comes to interest rates and the looming election, paired with the Bank of Japan’s decision to raise rates, is just one topic that has kept traders busy as of late. 

“It’s impossible to be involved in the markets without paying attention to developments in the US. However, Japan’s current situation is particularly significant, as they’re [The Bank of Japan] one of the few central banks raising rates while others are cutting,” says Wood. 

“This has broad implications, as demonstrated recently when the Nikkei dropped over 12% in a single trading session, affecting volatility and liquidity for weeks. This context is crucial for our day-to-day operations. If a portfolio manager wants to execute a trade days after such an event, they need to understand that liquidity may be reduced, and they must be confident in their strategy if they’re willing to pay more in the bid-offer spread.”

One of the newer members to the Ninety One team is Liam Hagan – formerly recognised as one of The TRADE’s Rising Stars of Trading and Execution in 2023. In the same year, Hagan joined Ninety One from Amundi where he had been serving as an FX trader for almost four years. He now trades foreign exchange for the G10 and emerging markets, while acting as a backup for the emerging markets fixed income traders when necessary.

“You’re looking at news headlines and the news flow really matters and can have massive ramifications on the day to day workflow in FX,” he explains. “Oftentimes your family sees the six o’clock headlines, and they ask have you heard about this? and you say yeah I’ve been living that over the course of the last eight to 10 hours.” 

Previously in his career, Hagan also spent four years on the sell-side at Société Générale in various FX sales roles. He moved to the buy-side in 2019 for a change of pace, looking to be more holistic in his approach to execution. 

“The sell-side tends to operate on a 24-hour basis,” he adds. “And what happens in one 24-hour period doesn’t necessarily have a bearing on the 24-hour periods either prior or post, which can be a little bit frustrating at times because you are somewhat chasing the narrative, whereas on the buy-side, your approach becomes much more long dated and holistic.”

The frontier

Ninety One specialises in trading the emerging and frontier markets, an area of expertise that brings with it a layer cake of nuance that the team must incorporate into their day-to-day workflows. Frontier markets are more established than LDCs [least developed markets] but are less established than the emerging markets. They’re newer in terms of access to capital but less developed in terms of how feasible it is to get into them.

It means workflows aren’t always as straightforward, explains emerging markets trader Richard Willis. Willis is one of the longer serving members of the trading team in London. In nothing short of a baptism of fire, he took his first steps into trading in January 2007 in the build-up to the global financial crisis. 

“Historically, investment banking and trading was fairly wild and there was a lack of control generally in terms of the way banks managed traders, P&L and risk,” he adds. “Post the GFC [global financial crisis] things have changed 180 degrees in terms of regulation and compliance regimes.”

Starting his career at Absa Capital on the Africa trading desk, Willis explains that as a junior market maker he was given a book of business – Nigerian and Ugandan bonds among other things – and told to face off against seasoned asset managers and peers. 

“Working at a bank, on a market making trading desk is arguably one of the most fun, but also one of the most stressful roles you can play,” he says. “You’ve got competing market makers that you are up against. You’re also going against very sophisticated investors who are no longer naïve. For example, if they look at a country like Poland, the buy-side research analysts and portfolio managers are analysing the nuances of each of these bond curves, so they’re probably know things a lot of time better than the sell-side trader.”

He moved to the buy-side and his current role at Ninety One in 2016 after five years at Barclays in an emerging markets trading role. He explains that he left the sell-side for a change of pace but that his experience there has proved useful in his current seat.

“What they [Ninety One] liked is that someone from the so-called ‘dark side’ was coming to join them to hopefully protect them from the advantages that the banks do try to take on the naïve in these frontier markets,” he says.

He now trades emerging markets bonds, credit default swaps (CDS), interest rate swaps (IRS) and foreign exchange.

When asked what key trends the emerging and frontier markets have seen as of late, Willis explains that there have been several substantial but necessary devaluations in national currencies to encourage foreign interest in markets such as Nigeria and Egypt. 

“You’ve seen it a few times in the history of their respective financial markets, the need for fairly substantial devaluations,” he explains. “We’re talking circa 50% in both their currencies this year. The cheapening in the local currency and the local assets, attracts offshore investment which is crucial for the long-term development of these countries.”

Subtleties and nuances

The nature of the frontier and emerging markets lend themselves to more off-the-beaten-track workflows. Given the liquidity landscape can often be more sparse or difficult to navigate, the use of local brokers alongside the bulge brackets is something Willis thinks is essential to minimise market footprint. Due to lower demand, bulge brackets will sometimes not cater for the particulars of what frontier traders are looking to execute. 

“Say a large real money account wants to buy South African Government Bonds at the same time as us because of the positive sentiments there post the elections, I know the logical approach is to go to a bulge bracket US investment bank because it’s easiest means. But sometimes you want to go to the road less trodden, and that’s when you make use of local brokers,” he says. “My preference typically is to go under the radar of the bulge bracket banks and to make use of smaller regional banks that access to domestic clients.”

Market nuances also mean the trading team at Ninety One are more voice driven and focused on relationships-based trading when it comes to trading FX and frontier pairs. This makes us somewhat of an outlier in comparison with the street, Hagan says.

“It’s very much about us having a picture as to whom has the ability to access the liquidity both onshore and offshore, who’s got a reliable enough franchise that they can potentially show us a risk price and then who internalise and offset the risk in a manner that’s not detrimental to either us or the wider market,” he says.

Data is therefore even more essential. On the FX side, Hagan confirms that using multiple single dealer platforms from a data perspective is usually a good strategy as teams can gain access to a better picture of market whether that be volumes in sector flows, revaluations country-by-country or real-time flight data around liquidity available either above the offer or below the bid.

“What we focus on be at the EM currencies and the frontier currencies, particularly like Nigeria, Egypt, Ghana, Kenya, these are markets that are very fragile, illiquid, and sometimes unobservable, even in Bloomberg,” he explains. “It can be very difficult to work out the quality of data sources. Who is saying they’re good five by five but is actually only good in one by one, and who has the ability to take down larger risk and partner with us on the larger trade in order to minimise the information leakage and then the subsequent market footprint that we see on our trades.

“There’s a pressing need to interpret data sources in so far as working out what’s reliable, how big offers or bids are available in as opposed to G10 focus, which is much more liquid and more commodifiable and increasing the electronic. It’s definitely a seat that leans more towards the high touch approach certainly from an FX perspective.”

It’s because of these subtleties and the firm’s global remit that global head of trading Gibson confirms outsourcing any or all of the trading desk’s functionality is not likely to be on the cards any time soon.

“If I saw a value of an opportunity in terms of part of the book of business being outsourced I would have to consider it. However, I genuinely just don’t see how outsourced sourcing trading is actually going to lead to better outcomes for the investors,” she explains. “If you outsource your trading, and my trade gets stuck behind a queue of somebody else who’s already been trading it or lumped in with another big block because someone else is trading it there’s no way the client gets a better outcome.

“Ultimately, while I can see the user case for smaller asset managers with more limited trading hours, for a manager of our size with our capabilities, I just can’t see an outsource function coming anywhere close to the execution standards we can achieve for our clients.”

Equities equities equities

Sitting in the European equities seat at Ninety One is Damion Kumarasinghe. Like Willis, his career was forged during testing times. He took his first role at Cofunds in 2000 “just to the tail end of the dotcom bubble bursting” as he puts it. He moved to Investec Asset Management – now Ninety One – in 2004 in an operations role before moving onto the dealing desk covering money markets and some FX in 2007 just in time for the global financial crisis.

“It was really interesting to see how that crisis [global financial crisis] started to emerge in money markets as rates started spiking before it really fully fed through to the other markets. Those were incredibly tough times, with long, exhausting days. It was an intense experience—one I’m glad to have lived through, though I wouldn’t want to repeat it,” he says. 

“Each day brought uncertainty about whether our counterparties would be around the next. We were frequently forced to suspend relationships as they teetered on the brink of collapse. It was a chaotic period – banks were reporting record trading days, but for all the wrong reasons. Volumes were huge, but the market was unravelling.”

Kumarasinghe then moved into an equities seat. The desk was a lot smaller then and so oftentimes he would be covering the US and Asia out of London. Market dynamics in Europe are heading in the same direction as the US, he tells The TRADE.

“Larger block liquidity is still very tough to find. You can get volume on screen, but you can sometimes struggle to find the more substantial block liquidity,” he says. “My concern would be that traders are getting more comfortable just trading throughout the day in small size and are reluctant to commit to larger blocks, especially if they cannot be confident that they are seeing all of the prints going through the market. I’m hoping that the consolidated tape helps with that to some degree.

“It [finding liquidity] varies from situation to situation. Often we won’t commit orders fully to a broker. We’ll always keep some on the side just in case any liquidity emerges and we have to be quick move on that liquidity if it appears. We may be working an order with a broker and then we see that we’re not really capturing the volume that’s going through the market and we see it going elsewhere, so we have to be prepared to move our order if needs be.”

With the addition of Sam Spencer who took over trading US equities, Kumarasinghe now only covers Europe. Unsurprisingly, fragmentation – something that has become a poster child for rhetoric surrounding the region – is often front of his mind. Europe, with its 27 member states each with their own venues and players, is naturally more fragmented than the US or Asia. And, as Kumarasinghe notes, new entrants looking to launch platforms and venues in the region must be mindful of their role in exacerbating this. 

“It’s a bit disheartening when a new entrant appears without providing any differentiating USP,” he says. “We need to have access to those liquidity sources so once they’re established, we’re going to use them in an all likelihood, but it just makes our job a little bit harder and sometimes fragments liquidity further. 

“There are always new entrants looking to come into the market, new intermediaries trying to insert themselves into the workflow. Sometimes that doesn’t necessarily leave us with a better endpoint. It can result in more fragmentation in the market as well as additional layers of fees. There’s a point where you definitely get diminishing returns.”

Technology wish lists

That being said there remain some areas where the traders at Ninety One are hoping to see some innovation. For Wood, the most important future development is seeing frequently used tools such as e-trading or list trading extend into into more niche areas of the market such as loans, CLOs or swaps where flow is still transacted bilaterally. 

“There’s a noticeable gap between widely traded products and niche markets that haven’t been as effectively addressed,” he says. 

“Technology platforms and banks need to see profitability to continue supporting and advancing those markets. Many banks will prioritise decisions that drive market growth if they see a financial benefit. We’ve seen this with new issuance automation and electronification, which still haven’t reached the desired level of efficiency.”

The traders at Ninety One, both in London and in their offices around the world, have a cohesive and collaborative approach to executing in the markets. The markets have by no means been easy for the last few years but as Gibson says, when have they ever? 

“Traders by nature enjoy a challenge. That’s their reason to be. Getting best client outcomes, chasing the best price, finding the best liquidity, the real value add is in those difficult situations and that’s where people get a sense of real and honest job satisfaction,” Gibson concludes.

Given the fact that several of the Ninety One traders have stuck around through multiple financial crises and still come back for more, it appears that may be true.

The post Trading at the frontier appeared first on The TRADE.

Now in its tenth year, the Rising Stars initiative recognises key buy-side individuals who go above and beyond the call of duty whether that be through day-to-day activities or through thought leadership on industry platforms.

Previously recognised individuals have gone on to head up some of the largest and most successful desks across leading asset managers and hedge funds.

To celebrate the 10-year anniversary of the initiative, The TRADE in collaboration with Instinet, will be hosting a special standalone event at Plaisterers’ Hall on 15 October to celebrate the 25 individuals.

Rising Stars alumni are also invited to attend the event and meet the newest additions to the prestigious list.

The evening will also include a panel discussion featuring past rising stars, including BlackRock’s Marie Geekie, Liontrust Asset Management’s Matt McLoughlin, Arbuthnot Latham’s Joe Bellman and Instinet’s Simon Dove.

Please join The TRADE and Instinet in recognising this year’s Rising Stars of Trading and Execution for 2024.

If you are buy-side and interested in attending the event, please contact Karen.delahoy@thetradenews.com.

Rising Stars of Trading and Execution for 2024:

Jade Beckmann, trader, Pictet Asset Management

Alex Boronkay, dealer, Evenlode Investment Management

Jesper Bremholm, trader, Kuvari Partners

Maddy Davies, trader, Liontrust Asset Management

Emily Fluet, execution trader, Jain Global

Joseph Forde, FX trader, Brown Brothers Harriman

Baris Halitoglu, cross asset trading, Nordea Asset Management

Stephen Hatfield, head of trading operations (equity), GSA Capital

Jerome Helbling, systematic analyst, Millennium

Kendell James, trader, Federated Hermes

Nav Jassar, fixed income dealer, M&G Investments

Albert Karavis, trader, Invesco Asset Management

Elliot Marshall, trader, North Rock Capital Management

Alan Martin Lucero, FX trader, Norges Bank Investment Management

Simone Martucci, equity trader, Anima Alternative

Nicola McGreal, equity trader, BlackRock

Carla Quintero, trader, HSBC Asset Management

Adam Reekie, multi-asset dealer, UBS Asset Management

Oliver Simmons, trader, Bell Rock Capital

Lars ter Braak, trading researcher, Robeco

Giulia Tesoro, trader, Millennium

Henry Thomas, trader, D. E. Shaw

Simon Toulon, EMEA equity trader, BlackRock

Hannah Warren, equity trader, Kintbury Capital

Daniel Wright, equity trader, FMR

Click here for more information about the Rising Stars of Trading and Execution 2024 event.

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Liquidity can mean several different things, the panellist explained. Depending on where you sit in the ecosystem various factors come into play when selecting liquidity and a provider, with cost playing a consistently crucial role.

“Liquidity has a cost whether we like it or not. It comes from the mismatch between two investors, timing and size – someone has to gain from the mismatch,” noted another panellist.

One panellist said that liquidity is about providing a reasonable price based on facts and not feelings. “What matters is not looking at a trade by its liquidity but instead, whether a provider is allowing you to trade effectively. A holistic approach is useful for buy-side,” they said.

Evolving sell-side

During the panel, the changing role of the traditional sell-side was discussed, with a particular focus on alternative providers’ increase in market share in fixed income.

Today, alternative liquidity providers have grown to compete with traditional providers as opposed to simply disrupting the landscape. It was noted by panellists that regardless of provider type, a holistic approach to providing liquidity is preferred.

Regulations such as Dodd Frank were noted as allowing new liquidity provider entrants to enter the free market. 

Technology was also suggested by panellists as a key driver behind the proliferation of new entrants, as well as incentive, with alternative providers ultimately plugging into gaps left by traditional players.

“Incentives are divers for innovation,” said one panellist. “Looking where traditional banks left gaps is useful. It should be noted that starting from scratch is easier than banks using legacy technologies.”

The diversification of toolkits was also noted by a panellist as a driver behind the growth of alternative liquidity providers, particularly given the increasingly diverse instrument universe firms are looking to trade.

What traditional and alternative providers prioritise is ultimately different. Alternative liquidity providers – who are often more technologically focused – are often more focused on electronic smaller tickets flow for example.

As volumes increase across the spectrum, panellists argued that there is plenty of space for new liquidity providers as well as traditional ones.

“The differences are clear,” said one panellist. “It’s not about climbing rankings but bringing innovation into the market.”

Bonds ETFs

When exploring the liquidity landscape more generally, bond ETFs and the growth of this segment was also highlighted by panellists as being positive, with more sell-side said to be using ETFs alongside other tools to boost liquidity. 

Alternative liquidity providers have been leading on the provision side. However, traditional banks are investing and getting more active in ETFs with increases in market share.

“Traditional branks are integrating ETFs with other parts of their capabilities,” highlighted one panellist. “We are seeing a diversification of ETF liquidity providers which is good ultimately.”

“ETFs shine during volatile instances. When underlying bond markets become difficult, ETF volumes surge, giving the ability to shift risk,” added one panellist. 

ETFs are still a small percentage on bond markets, as noted by panellists. Holistically, the assets under management they cover is relatively small. However, panellists agreed that their usage could be key to boosting liquidity particularly in volatile periods.

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