Liquidnet partners with TP ICAP Midcap to improve block liquidity in small and mid-cap equities

The pair aim to increase block liquidity in European SMEs using their combined networks and technology, The TRADE can reveal.

Liquidnet and TP ICAP Midcap have partnered to improve block liquidity in the European small and mid-cap equities space.

The agency broker and dark pool operator and the broker and investment bank said their combined forces will help generate opportunities in the market, solving a challenge voiced by most asset managers.

“Finding liquidity opportunities in hard to trade names has always been at the core of what we do at Liquidnet and this collaboration aligns with our commitment to solve the most difficult liquidity challenges for our buy-side members,” Liquidnet’s global head of equity strategy and head of equities for EMEA, Chris Jackson, told The TRADE.

“Combining our deep global liquidity, our technology and our suite of innovative liquidity discovery tools and services with TP ICAP Midcap’s unique expertise and extensive SME liquidity network allows us to solve for what remains a challenge for most asset managers – accessing block liquidity in small and mid-cap names.”

Block trading has been central to much of the regulatory debate in Europe and the UK post-Brexit. Europe is looking likely to favour a more restrictive approach to where blocks can trade, a decision that has proved divisive among industry participants. 

For blocks in European SMEs in particular, investment is also limited thanks to a lack of research, something not helped by unbundling rules brought in under Mifid II.

“The lack of research limits investment in SMEs but for many asset managers it is first of all the lack of secondary market liquidity that is the real problem. There is a need to improve secondary market liquidity as a means of boosting investment in SMEs,” managing director at TP ICAP Midcap, Charles-Henri Berbain said in a statement.