step. But Bellaro justifies it with the
argument that if a buy-side firm cannot
trust a broker, then that broker should
not be on the broker list anyway.
“We opened our electronic
flow in order for our sell
side coverage to see our
flow. We wanted to be able
to interact with available
strategic liquidity at a broker
if it existed. As a result
some of our largest block
trades have taken place as
a result of this initiative. We
can still be stealth on our
electronic orders if needed
but we find less need to do
so currently.”
Aside from such open collaboration
with the sell-side, there are also
opportunities to be had by partnering
and collaborating with other players
in the industry, both on the buy-side
and the sell-side. One example of this
is the Plato Partnership, a consortium
of buy- and sell-side firms that aims
to create a block trading utility.
Deutsche Asset Management is one
of the founding members.
Deutsche Asset Management is
keen to emphasise the importance
of education on the trading desk.
The company completed a major
round of investment in its technology
platform in 2015. Deutsche Asset
Management has also been building
up its operations in the US, where
it has been active since 2013. The
US trading desk is headed by Matt
Montana, who was previously at
Bank of America Merrill Lynch for
20 years. Bellaro reports that the
company’s stakeholder interaction
has improved in recent years
due to better organisation and
communication. In addition, Deutsche
Asset Management’s program trading
activities were given a boost when the
company hired Vincenzo Vedder, a
well-respected program trader. Bellaro
estimates that roughly 40% of his
notional value traded is now program
traded. In addition, Deutsche Asset
Management is building an Asian
trading operation, which is expected
to launch this Spring and is due to be
headed by Andy Ho.
“To be successful, you need resource and
technology support,” said Bellaro. “We
have to continue to reinvent ourselves to
be successful. As the winds of change are
coming it’s important to keep an eye on
what’s new. Read the tea leaves and put
a structure in place that will give you the
advantage.”
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