THE HUNT
FOR
LIQUIDITY
Mark Pumfrey, CEO for EMEA, Liquidnet
L
iquidnet’s origins go back to 1999
and 2000, when founder Seth
Merrin, CEO of and founder of
Liquidnet, met with a number of
US asset management companies to
discuss how to make equities trading
more efficient. Of these, around 40 agreed
to support the idea of blotter sweeping
order management systems to find
large blocks of stock, and Liquidnet was
founded. Now, sixteen years on from the
launch, Liquidnet is a well-known part of
the buy-side trading landscape.
On joining the company in December
2012, Pumfrey decided to evaluate what
the company's clients wanted to see. His
background in equity leadership positions
10
at Bank of America Merrill Lynch in EMEA
had taught him how critical relationships
are to ensure a business understands what
its client’s requirements are.
“The ongoing dialogue with our
members means that we can align
the development of our equity and
fixed income platforms and trading
tools to their ongoing needs," he told
the Buy-Side Perspectives. “Liquidnet is
a Member community and therefore
this inclusive approach is intrinsic to
everything that we do. When Seth
Merrin started the business he opened
a conversation about how to create a
new way to source liquidity, he made
ongoing client engagement part of
www.buysideintel.com
Liquidnet's DNA.”
What Pumfrey found is that there were
two things the 830 Liquidnet members
wanted. The first was improvements
to trading behaviour, for example to
stop traders from ‘fading’, which occurs
when a trader has a match, but fails to
execute. The other was a fixed income
offering, where the community felt that
there was a need for a similar kind of
platform to Liquidnet’s equities offering.
This requirement has been driven by
regulatory changes; the reduced inventory
from the sell side and the expanding
universe of fixed income instruments,
all of which have combined to create a
dearth of bond market liquidity.
December 2016