Newly formed European agency broker Kepler Cheuvreux has integrated its operations and will leverage its Continental presence and CA Cheuvreux’s execution tools to drive trading operations.
The new entity’s offices in London, Paris, Madrid, Amsterdam and Stockholm are already merged, with other offices to follow. Trading will be run out of Paris and London, it has confirmed.
Kepler Capital Markets formally acquired French banking group Credit Agricole’s European agency brokerage arm CA Cheuvreux in April, although talks were initially made public in July 2012.
“Integration of the two firms began in May and at this stage the two firms are almost completely integrated in terms of their research product and sales forces,” Robert Buller, global head of account management for Kepler Cheuvreux told theTRADEnews.com.
“The combined execution capabilities are largely taken from the Cheuvreux side and will be run out of our two trading hubs, London and Paris. We have the same products Cheuvreux offered including its algo suite,” he said.
The execution services will include electronic, sales trading and program trading, which the firm said rivaled any other broker.
Sell-side execution services will be completely electronic, offered through the alternative execution services business, although institutional investors have access to sales and program trading services.
“Regarding the mix of buy-side trading, we have witnessed a slight swing of the pendulum back to ‘high touch’ execution as the clients seek to reward their brokers at a time of constrained volumes,” he said.
Kepler Cheuvreux will leverage its Continental presence to expand its execution capabilities, which will be overseen by Ian Peacock as global head of execution services.
“We are a European broker, with a sales trading and distribution presence in all the main European financial centres – we tap into flows and liquidity which are simply not available to London-based competitors.”
The Blink multilateral trading facility (MTF) originally operated by CA Cheuvreux will not undergo any merger-driven changes, but will continue to attract liquidity from institutional investors due in part to the absence of high-frequency trading within the pool, Buller said.
The MTF offers trading in 1,800 stocks and across 14 European markets, with some 1,200 institutional investors active in the pool worldwide.
The combined entity now has the largest footprint of companies under coverage from a broker in Europe ex-UK, with sector and company research covering 765 stocks according to an independent evaluation by Thomson Reuters-owned analytics firm StarMine.
The integration of Cheuvreux’s execution services was modelled upon Kepler’s 2011 partnership with Italian banking group UniCredit to create an equities unit offering cash equity research execution services for western European stocks. UniCredit has taken a 5% stake in Kepler Cheuvreux, with the latter describing the CA Cheuvreux acquisition as a “natural evolution” to the UniCredit partnership.
Credit Agricole CIB will maintain a 15% stake in the new entity and will provide long-term financing to the broker.