As Europe’s execution landscape broadens with a greater variety of venue choice post-Mifid II, European equity execution is increasingly shifting towards bilateral trading, a Bloomberg Intelligence report has revealed.
According to the 2025 European Equity Trading Study, bilateral trading now accounts for approximately 55% of total European market activity, spanning systematic internalisers (SI), off-book on-exchange and over-the-counter (OTC) trading.
Specifically, the report showed that SIs currently made up approximately 14% of European equity execution activity in Q1 2025.
Out of the heads of trading and senior traders evaluated in the survey, 48% said they were in favour of bilateral liquidity, with large funds in particular showing strong support.
As a result of this lit market trading has experienced a simultaneous decline over the past few years, dropping from 47% in Q1 2018, to 40% in Q1 2025, according to big xyt data.
Meanwhile, dark pool trading has remained largely consistent over the same period, currently accounting for approximately 5% of market activity.
The growth of bilateral trading across European markets also coincides with an increasing uptick in buy-side engagement with electronic liquidity providers under the systematic internaliser (ELP SI) regime, largely as a result of providers enhancing their volume and price quality, indicating future growth in this sector.
For buy-side participants in the survey, Goldman Sachs came out on top as the leading choice for directing SI flow, with JP Morgan and Morgan Stanley ranking second and third.
Speaking on this increase, one small asset manager interviewed in the study said: “We’re seeing more and more liquidity opportunities as these ELPs obviously are upping their flow. They’re just coming in and they’re willing to offer you prices, or willing to offer you liquidity more and more. So we’re kind of engaging more with that bilateral liquidity.”
Read more – The liquidity conundrum persists as experts unpack the current state of play at TradeTech Europe 2025
Specifically, the study pointed towards increased integration of market makers and ELP SIs into buy-side trading workflows, such as their execution management systems (EMS), with 40% of the funds surveyed stating that they interact directly with market maker Optiver.
Additionally, 24% reported accessing Optiver’s liquidity indirectly via their broker, with the study indicating that more ELP SIs are likely to further explore direct integration with buy-side EMS as bilateral availability and adoption is set to expand further.
Bloomberg Intelligence interviewed 103 head and senior buy-side traders from largely from traditional asset managers as well as hedge funds to collate its 2025 report, from firms managing more than £25 trillion in assets, and respondents in the EU, UK, North America and Switzerland.