The buy-side is in desperate need of next generation analytics that help drive decision-making, yet execution management system (EMS) providers are falling short of the mark, according to new Portware chief executive Alfred Eskandar.
Eskandar – who joins the US-headquartered trading systems vendor from buy-side focused block trading platform Liquidnet – said as trading has become more automated and complex, the buy-side has demanded more from their order and execution management systems.
“If it ever did, simply providing pre- and post-trade data simply doesn’t cut it anymore,” said Eskandar.
He believed over the next three-to-five years, trades would continue to become increasingly multi-leg and global in nature and execution management system (EMS) providers needed to be able to support the buy-side as execution became more complex.
“One size fits all might work when the markets are expanding and all are lifted by a rising tide, but that is not the environment today,” said Eskandar. “Institutions are looking for workflow efficiencies throughout the whole organisation – from the portfolio manager to the analyst, to the trader to the back office.”
Eskandar said too often research and development at EMS providers was not creating real value for the buy-side.
“Many firms don’t do enough R&D or they don’t it the right way. By partnering closely with your clients you obtain great insight into present and future problems,” said Eskandar. “The organisation choosing Portware is not choosing us on cost but on a recognition that they have a unique opportunity to gain an advantage in their business.”
He advocated more EMSs should run open architecture platforms to free the buy-side from being locked in to one provider. “If the underlying platform is closed, then this limits the customer’s ability to benefit from other vendors,” Eskandar said.
However, Eskandar said for some products, Portware would start positioning itself as more exclusive and selective of the firms it worked with.
“Because our FX platform is so unique, we are looking at imposing a pre-qualification stage before firms are allowed to see it,” said Eskandar. “With such great functionality, I don’t want all its features out there on the street for people to see unless they are willing to make a certain level of commitment. You can only do that when you have something special.”
Eskandar’s appointment comes as Portware sees a number of changes to top brass. Scott DePetris, currently chief operating officer, now becomes president and COO, while founders Eric Goldberg and Ary Khatchikian will chair the newly formed board.
Portware said the new management structure would add critical “strategy, sales and marketing expertise while streamlining operations to better manage” growth.
Larry Tabb, CEO of reseach firm TABB Group, said execution management and electronic trading was at an early stage of its lifecycle, and in reality, electronic execution was about making intelligent decisions based upon a host of signals.
“As financial reform forces greater transparency, an increasing amount of electronic decisions will need to be made based on a wider array of actionable signals,” Tabb said. “Portware is in a great position to leverage and extend these trends.”