Three tips that have helped me along
the way
How has the trading role changed since
your time at Liontrust? Do the buy-side need more or fewer
broker relationships to find liquidity?
The multi-asset trading role has
definitely become more data driven
due to market evolution, which is
something we try to embrace and
use to our advantage. Although we
really value the relationships we have
with our execution partners we now
have more quantitative angles than
ever before to analyse execution
quality, consistency of pricing and
capital commitment, alongside the
more traditional qualitative execution
factors. Try and maintain a balance. The job
We currently connect to approximately
is stressful which is easy to get drawn
50 brokers although as you would
into, but make time in the day to take
expect 80% of the volume goes through
a step back and review processes and
the top 20 counterparties with the
see where we can improve rather than
others providing more of a specialist
repeating the same thing over and over
service. It obviously depends on the
again.
type of security you are trading, but in
Network. I think we can all do more of
the credit market, the evolution of all
this but try and take a meeting or a call
to all functionality may mean that you
once a week with someone you haven’t
can access more liquidity through fewer
met, it’s great to hear other people’s
brokers or platforms going forward. The
view on things and there are so many
brokers will still provide a service, but it
could become more time
The evolution of the market under MiFID II has
and cost efficient to use a
been a good thing for the end investor. It has
platform as an aggregator
for some of the liquidity out presented the opportunity to demonstrate
there in the fixed income
how you add value as a trading desk and to
market.
differentiate yourself as a business.
Which areas do you think are vital to
take trading to the next level?
Technology and use of data feature
at the top of the list for most buy
siders but these areas often require
collective input to find a solution for
the majority as they are expensive
to setup individually. There is more
data in the MiFiD II world due to
reporting requirements but there
isn’t one platform that can put it all
together to enable the buy side to
benefit from it. The top three fixed
income execution platforms have an
estimated 90% of the data between
them but there is no incentive to
share it to create a consolidated tape.
The problem comes down to budget
Challenges ahead for fixed income…
One of the biggest challenges we
currently face is providing accurate
and meaningful TCA for our clients.
The data is available, but is fragmented
across multiple platforms which means
it takes a lot longer to consolidate your
data, come to meaningful conclusions
and find actionable insights. This is a
common theme for other buy-side
trading desks and with more detailed
questions being asked by investors it
seems like a key area for change in the
coming months.
Speaking of balance, I counter the good
I see the liquidity
done by exercise with a passion for good
landscape changing
as more counterparts
food and travel which are my favourite
embrace the all to all
ways to relax with the family.
trading functionality
coupled with the reduction in capital
and resource and someone being
commitment from the sell-side. One
willing to invest in a platform that
of the largest crossing networks in the
puts all the pieces together, which
equity space is slowly gaining traction in
is expensive. Without clients willing
fixed income and I see that continuing
to pay for that offering we are not
as more institutions get used to the idea
in a position to move forward. I see
of it and build it into their workflow.
this as the biggest challenge in fixed
Another area of focus will be electronic
income which is preventing us getting
market makers, and how we interact
to a more transparent market and
with them in general. They are a large
having dependable reference points
part of the volume in smaller size so for
for our trading and analysis. I think
platform trades it may suit for certain
the solution will involve a partnership
flow -but do you want to open up to
between buy-side, sell-side and
them all of the time when trading all to
execution venues themselves in order
all?
to create a useful market utility.
Winter 2018
www.buysideintel.com
good people in this community to share
common challenges and solutions with.
Be honest, upfront and move on quickly.
Again, it’s a very small industry so you
need to be honest when things don’t
go to plan but make a point of learning
from it, improving processes and
moving on are really important elements
of any trading role.
“The 3 Lions at Liontrust; Martin (centre) with his colleagues
Matthew Orchard (left) and Matthew McLoughlin”
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