[ B U Y- S I D E
I N T E R V I E W
|
G I A N L U C A
M I N I E R I ]
invest in technology. Build the
infrastructure. You build your con-
nectivity to the venues where you
feel you can find liquidity.”
Electronification = efficiencies
The company currently trades 90%
of its government bonds electron-
ically, with the same number in
FX and 75% in corporate bonds
using platforms like Bondvision,
MarketAxess, and FXAll to tap
liquidity. On the equity side, it
uses lit markets for the most liquid
orders while it also finds value
in dark pools execution, such as
Liquidnet, when liquidity is low or
order size is relevant.
“We feel that in a dark pool the
confidentiality of our orders is
better protected and there is a cost
efficiency vis-à-vis lit markets,”
says Minieri.
The company also uses liquidity
aggregators. Regarding the latter,
Pioneer has taken the step of
merging orders—something which
is going to be of benefit in light of
MiFID II’s large-in-scale waiver.
“Increasing the average size of
the order will give us the pos-
sibility to avail of scale waivers
You build your connectivity to
the venues where you feel you
can find liquidity.
28
TheTrade
Winter 2016
and achieve better pricing for our
clients,” says Minieri. “Under new
MiFID II rules, smaller asset man-
agers might be tempted to park
their order on their blotter until
they reach the level of size and
scale. But we feel that you might
deteriorate the price formation
process that way. If your orders are
parked on your blotter you are not
giving the client the best service.”
Minieri says that electronifica-
tion has created efficiencies to
allow traders to employ their time
where they can really add value to
the investment process. And this
is mostly in the less mainstream
areas —things like high-yield,
emerging markets and small caps,
for example. Efficiencies available
in the traditional asset classes
are diminishing— “you can save
no more than a fraction of a basis
point,” he says.
The future of trading
For the future, Minieri sees the
evolution of buy-side to buy-side
platforms as the next stage of mar-
ket development. He says the buy-
side is already becoming a more
opportunistic buyer and provider
of liquidity.
“The buy-side is taking proactive
steps to develop all-to-all platforms
where we can trade not with just
the sell-side but the buy-side,” he
says. “Instead of complaining of