[ C O V E R
I N T E R V I E W
"For me, last year
was probably the
worst year that I
have seen in my
career in terms
of high-profile
departures and
people being cut."
it’s a large US investment bank,
or a boutique broker, the traders
place emphasis on nurturing
those partnerships at various
levels to ensure they can make
the most of opportunities as
they arise.
Being an active, liquidity
seeking investment firm
with $1.2 trillion of assets
under management, T. Rowe
Price needs options on
trading institutional-sized
flow, and this ultimate-
JEREMY ELLIS, HEAD
ly comes down to those
OF EUROPEAN EQUITY
all-important relationships.
TRADING, T. ROWE PRICE
But the landscape has not
been kind to banks and
brokers, which now seem
to be shedding headcount
across trading divisions on
a systematic basis to deal with rising costs of
operation and declining profits.
“We’re very conscious of the challenging
environment for the sell-side, and we have felt
it deeply,” Ellis explains. “For me, last year was
probably the worst year that I have seen in my
career in terms of high-profile departures and
people being cut. Some of those people we knew
very well in the industry, and they were very good
|
T.
R O W E
P R I C E ]
at their jobs.”
“However, there was a direction
of travel in terms of how brokers
were developing their own model
and that was well understood. We
felt there was inevitability about
some of the cuts and the areas
where that tends to happen and
had prepared ourselves accordingly.
Brokers have had to focus on where
their value proposition is. Like
everybody else, they are having to
produce more with less.”
In the context of coronavirus as
we all speak, and Ellis’ reference
to market participants reverting
to high-touch, it’s understandable
that relationships are the forefront
of the focus for his team. It can be
a headache for buy-side firms like
T. Rowe that place a lot of empha-
sis on their counterparties, but
ultimately, it puts the business in a
good position.
“Jeremy has probably been work-
ing more closely with the brokers
recently because of the turnover
we’ve seen the industry,” Pinning-
ton adds. “He has had to field those
calls when someone is let go, and
deal with the ramifications of that
in terms of maintaining those rela-
tionships. If you lose someone that
has been covering you for 10 years,
then you need to make sure you
find the right person to take their
place. Relationships are at the core
of what we do, so it is incumbent
on us to ensure we find the right fit
and do our bit to make the relation-
ship work."
Direction of travel
While relationships are at the core
of the execution team’s processes
at T. Rowe Price, automation and
technology play an equally impor-
tant part. Canwell oversees the sys-
tematic side of the business with a
segment of flow already completely
automated. He recently led the
development of the asset manager’s
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