Asia Agenda

Beyond the blocks

To meet the needs of leading investment managers, today’s execution services must be both global and local, which is why Liquidnet has chosen Rob Laible – a man with detailed knowledge of Asian markets – to spearhead a new strategic push.

Last week, the block crossing network operator and agency broker, announced the launch of a new global business line, Execution & Quantitative Services (EQS), headed by Laible, who joined from Macquarie in July.

According to the press release, the aim of EQS is to provide clients with “more efficient ways to optimally source diverse liquidity and satisfy best execution objectives”. The reality is perhaps more prosaic, but no less ambitious. Essentially, Liquidnet is putting a number of their existing non-block execution-related services under a single banner to give them global scale and relevance. It has also boosted its in-house resources and expertise with new hires.

“At one level, EQS is about ensuring our execution tools and services deliver global consistency from a workflow perspective, but are tailored to the needs and realities of individual markets,” says Laible.

Although known primarily for its block trading capabilities, Liquidnet has offered an ever-widening range of execution services to the buy-side in recent years. The firm provides algorithms, analytics and execution consulting services in a number of markets already. Part of Laible’s remit for 2015 will be to gradually bring the EQS services to all 43 markets in which Liquidnet operates and to deliver the ‘next generation’ of execution tools to buy-side users.

“EQS algos and analytics will leverage Liquidnet’s unique pool of liquidity while also enabling clients to take advantage of opportunities on lit and dark venues,” he explains. “For example, our dark liquidity-seeking algo aims to help the user navigate pools with minimal signalling, but its ‘I would’ functionality maintains the option to trade the order as a block should the opposite side become available.”

Laible previously joined Macquarie in January 2013 from Nomura, where he was head of electronic trading and programme trading sales for Asia, having joined the Japanese bank when it took over the Asian and European operations of Lehman Brothers in 2008. He was based in Hong Kong for seven and a half years, but is now operating out of Liquidnet’s New York office. With so much Asian experience, Laible knows the importance of adapting global offerings to local markets.

“We want to offer EQS services in all the markets in which Liquidnet offers crossing services. But in certain Asian markets and elsewhere, it can take time to roll out new services, for example ID markets, so we expect to launch first in the markets where electronic trading is most established. We’ll roll out in stages, in parallel with client demand,” he says.

Liquidnet launched in Asia in 2007, the same year that it bought US agency brokerage Miletus Trading to expand it range of execution services. The firm has steadily increased its footprint in Asia, with Indonesia (2011), the Philippines (2012), Thailand (2013) and India (2014) the most recent markets added to Liquidnet’s presence in the region. As well as building out its equities trading product range, Liquidnet has also developed a capital markets business to connect issuers with investors more effectively, launched block trading joint ventures with SIX Swiss Exchange and Deutsche Börse, and acquired electronic fixed income trading platform Vega Chi.

In September this year, the firm began the roll-out of its Liquidnet 5 front-end platform in Asia, which offers clients enhanced abilities to negotiate blocks, but also provides access to a wider range of services including Liquidnet’s pre- and post-trade analytics, commission management capabilities and access to algorithms. The platform will be the primary channel through which buy-side trading desks access the services and tools developed by Laible’s EQS team.

Having grown and refined its non-block execution services over several years, albeit somewhat under the radar, Liquidnet and Laible appear undaunted at the prospect of taking on the bulge-bracket providers more directly.

“Some parts of the execution process have become commoditised, but far from all,” he says. “For example, the ability to provide the recommendations and the analytics that help a buy-side trader to work an order throughout the day, responding constantly to changes in market conditions, is an area where we feel we can differentiate.”

Chris Hall +44 (0)20 7397 3819