Institutional crossing platform Liquidnet is set to extend its reach into Europe as it benefits from increased interest in equity markets and block trading.
For EMEA operations, the market share of continental activity has surged to around 12%, up from 7% last year, as Liquidnet’s efforts to diversify from its UK-centric operations show early signs of success.
“We are very focused on expanding our European footprint and in particular we see growth with France, Germany, Holland and Sweden,” Mark Pumfrey, CEO of EMEA for Liquidnet, told theTRADEnews.com. Pumfrey believes in 18 months, continental asset managers’ business could represent 18% of total EMEA volumes.
Sweden in particular is set to surge, according to Pumfrey, in part due to a ruling last November that allows greater use of commission sharing agreements (CSAs) by Swedish asset managers.
“Due to the recent changes promoting and facilitating the use of CSA agreements in Sweden, we believe this now offers us an opportunity to connect with the region’s largest asset managers to help them pay bills and achieve best execution,” adds Pumfrey.
The bump in European volumes forms part of an overall increase in Liquidnet volumes, which indicate buy-side firms have turned to large block trades as Europe’s equities markets trend upwards. According to Pumfrey, the platform’s average execution size has surged 50% in addition to “strong growth” in overall trading volumes.
“This is related in part to international shifts in institutional exposure to European equities as US and European asset managers move back into these stocks from a very low base,” Pumfrey said.
In July, the firm launched a partnership with Deutsche Börse to combine flow between the Xetra MidPoint dark pool and Liquidnet. This comes two years after the institutional trading platform launched a similar tie-up with SIX Swiss Exchange.
Although the firm has continually held talks with exchanges for similar linkages, Per Loven, head of EMEA corporate strategy and product, said this is an area the firm would continue to target to expand trading volumes and opportunities for its members to increase crossing opportunities. He said current discussions with a small number of exchanges were progressing, but would not speculate on when another tie-up would be finalised.
“We’re continuously looking to develop links with exchanges globally and in addition to the Swiss Exchange and Deutsche Börse, we are currently in ongoing discussions with a number of major exchanges and it is likely we will have more of these tie-ups in the future,” he said.