Citi's transition management business is distinct from program trading , and operates at arm's length from all trading functions. The service leverages program traders, as well as operations, compliance, legal and other areas of the bank, to provide expertise across all areas involved in transition management. The firm says its strengths as a broker dealer and custody bank lets clients benefit from a global, direct multi-asset execution expertise, natural daily liquidity, risk management and product expertise.
Size of transitions
Citi performs transitions of all sies, but keeps information about deal size confidential.
Citi uses FX forwards (both deliverable and non-deliverable forwards, futures, exchange-traded funds, swaps, options, and fully-funded notes) and provides a detailed analysis of the costs, pros and cons of each as part of pre-trade analysis.
Use of crossing
Citi uses its internal crossing network, Citi Match, to help reduce market impact, transaction costs and signalling risk. The bank’s smart order routing technology accesses external alternative execution venues both in the US and overseas. Citi only crosses when it is in the best interest of the client.
Citi provides full pre, intra-day, and post-trade analysis for clients that examine the transition for a cost and risk perspective before it begins in order to choose the most effective strategy. Subsequent analysis then details every aspect of cost after the transition is completed. Reports are available on whatever schedule the client requires and can be customised to their chosen format.
Citi favours the use of implementation shortfall as it captures every penny of cost involved. The firm also provides comparisons to other benchmarks for reference or as requested.
Citi is happy to contract under fiduciary guidelines, and offer full fiduciary coverage pertaining to every aspect of transition management.