Buy-side agrees market makers will lead ‘new era’ of liquidity

State Street survey finds buy-side predict increased role of market makers in accessing liquidity.

Buy-side institutions have agreed market makers will play an increasingly important role in accessing liquidity, according to a recent survey.

A poll of 300 global asset owners and asset managers – conducted by State Street - found 49% of respondents agree the role of non-bank institutions as providers of liquidity will continue to grow.

A further 42% of those surveyed stated the role of hedge funds as providers of market liquidity will also grow.

“What the industry needs to look at when it comes to accessing liquidity is asking what are people going to do and what are the opportunities?” said Alex Lawton, head of securities finance for EMEA, State Street.

“We have seen a real shift in dynamics between new participants coming into the market and how they can interact with other market participants going forward,” he added.

The report explained market roles are shifting amid new entrants taking on new responsibilities and electronic platforms “revolutionising the way firms transact business.”

Just under half of respondents stated market liquidity considerations are prompting them to increase their use of electronic trading platforms.