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ric Boess, global head of
trading at Allianz Global
Investors (AGI), is a busy
man. He has been in the role since
January 2016 and the last two years
have not allowed him much rest.
Apart from the usual concerns of
finding ways to improve on liquid-
ity and organising the company
to deal with an ever expanding
asset base, Boess has been mainly
tied up with regulations—and that
principally means the Markets in
Financial Instruments Directive II
(MiFID II).
“I would love to tell people that
I am primarily focusing on capital
markets and solving liquidity issues
but I am spending much more time
on regulatory issues these days.”
Boess joined AGI in 1994 and was
promoted to derivatives trading
head in 2007. Having previously
run the derivatives trading group
meant the role was not completely
new, he says, and indeed the tran-
sition was a smooth one. AGI was
set up as a well run trading shop by
his predecessor, Christoph Mast, so
there was no need to change any-
thing except to update reporting
lines. Boess found that he needed
to revamp the old equity-centric
lines where regional trading heads
were reporting to regional equity
chief investment officers (CIOs).
He rejigged this so that regional
trading heads now report into
him. It was a small but important
change.
“Our trading desk has grown
from being equity-centric in the
early 2000s to truly all asset classes
now,” he says. “Covering all major
asset classes requires different
skill sets and know-how since each
market has its own specific micro
structure, legal framework and
liquidity patterns.”
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TheTrade
Autumn 2017
B O E S S ,
A L L I A N Z
Boess himself reports to the
global equity CIO and global head
of fixed income who in turn report
to AGI’s chief executive and global
CIO, Andreas Utermann. He cur-
rently manages a team of 43 traders
in five countries covering all major
assets. AGI has looked to balance
its trading team between asset
specialists and generalists. His
preference is for the former, but
not to the extent that the business
becomes too niche.
“I want specialists in each asset
class but at the same time consider
cross-asset class fertilisation very
important,” he says. “To achieve
this, trading in Frankfurt is located
G I ]
Frankfurt, Munich, New York, San
Francisco, San Diego, Hong Kong
and Tokyo.
While day-to-day communication
is done via phone, email and chat,
Boess has emphasised the need for
face-to-face interaction. Indeed
AGI has a large travel budget, he
quips, with traders frequently on
the road to meet their counterparts
in different countries.
So what is the main challenge
right now? Without any hesitation,
Boess replies MiFID II.
“MiFID II is the elephant in the
room,” he says. “It is reshaping the
European market microstructure
for all assets. The US and Asia are
“In Europe we are faced with huge amounts of
regulatory change and uncertainty.”
in one room where 20 traders cov-
er equities, bonds, currencies and
derivatives trading. They can shout
across the floor when needed. It
works well.”
Elephant in the room
For its European business, AGI
has split traders with specific
roles—nine on fixed income and
eight trading equities. Things are
different in Asia and the US where
traders are required to handle
more than one asset. He says em-
ploying more generalists is not the
best option if a company wants to
deliver top quality trading services
and market insights to portfolio
managers, most of whom are ex-
perts in one asset class.
With €498 billion in assets, AGI is
a big, sprawling shop. The compa-
ny considers itself truly global and
as such does not have a headquar-
ters with its offices split between
major offices in London, Paris,
comparatively stable now from a
regulatory point of view. But this is
very much not the case in Europe
where we are faced with huge
amounts of regulatory change and
uncertainty.”
The new pan-European regu-
lation has been taking up most of
his time—time which could have
been spent dealing with issues of
liquidity and trading. Clarity—or
rather a lack of it—seems to be
the dominant theme here. Getting
to grips with the abstruse work-
ings of MiFID II has been made
more difficult by the lack of clear
instruction received from the
European regulator, European
Securities and Markets Authority
(ESMA). Boess starts to list some of
the challenges occupying him from
MiFID II warning “this could be a
long conversation.” Certainly the
vagaries of MiFID II are impacting
the business across all asset classes.
In equities, for example, one of