ConvergEx Execution Solutions - Global Transition Management
ConvergEx's Global Transition Management (GTM) unit operates independently from its trading desks to deliver transition services that meet clients' objectives through accessing multiple venues. Using technology to help provide risk management is also a core part of its strategy.
Size of transitions
During the calendar year of 2011, ConvergEx’s average size of transition was US$311.7 million, while the largest transition by value was US$3.4 billion.
Minimums on stand-alone transitions tended to be in the US$1 million to US$5 million range.
ConvergEx doe snot engage in anticipatory hedging without client consent, but can propose customised hedging strategies designed to mitigate risk driven from time zone dislocations, market capitalisation skews, and cash exposures. A cost benefit analysis is typically created to weigh the perceived value of certain strategies, and evaluate their effect on the intended exposures.
Use of crossing
ConvergEx attempts to minimise market impact by crossing with internal order flow and sourcing volume on alternative trading systems and other liquidity options when possible, but does not charge transition clients for internal crosses within the context of their specific transitions.
Comprehensive pre-trade cost analysis prior to event commencement is provided, along with intra-transition updates for multi-day trades and a detailed post-trade cost decomposition comparing to initial estimates once the vent is complete.
The primary benchmark is implementation shortfall, which is calculated as trade data minus 1 close, while VWAP, open and close are used as alternate benchmarks to helo evaluate the effect of market movements and execution quality.
ConvergEx’s central fiduciary duties are split between three overarching areas. Firstly, providing access to liquidity, with global equity flows and diversified sources and fixed income. Secondly, high quality execution, maintained by an experienced global portfolio team and the development of proprietary systems, algorithms and alternative trading systems. And thirdly, client safeguards, which include not engaging in anticipatory hedging, at risk proprietary trading and controlling leakage.