Fixed income trading specialist Algomi has now signed up 100 buy-side firms to its Honeycomb network as competition among bond platforms heats up.
Algomi’s Honeycomb network provides information-matching to optimise fixed income liquidity and enable investors and dealers to find each other.
It has managed to double the number of buy-side firms signed up in just two months. It launched for the sell-side in spring 2014 and began being rolled out to the buy-side at the end of the year.
Gathering a critical mass of buy-side participation is seen as being crucial for many of the new bond trading platforms that have sprung over the past year. Earlier this month, reports began circulating that Bondcube, an all-to-all fixed income trading network, had gone into liquidation after failing to attract sufficient trading activity.
While several dozen platforms are currently vying for buy-side members, market commentators expect that only a handful will be viable in the long run.
Commenting on Algomi’s milestone, Stu Taylor, co-founder and CEO, said: “The rapid uptake of the buy-side to the Honeycomb network demonstrates that there is an increasing need for more efficiency in voice corporate bond trading.”
“Doubling the number of firms on the Honeycomb network in such a short period of time is indicative of the liquidity problems that global credit markets face, and is testament to our robust sales process and technology teams that are onboarding the firms, enabling the buy-side to access the information that helps make illiquid trades happen.”
Honeycomb enables institutional investors to see which dealer is best placed to facilitate a trade in an illiquid corporate bond while minimizing market impact. Algomi currently has 11 major banks signed up and is continuing to add a variety of buy-siders to the network, including asset managers, pension funds and hedge funds.