Average trade sizes on Liquidnet increased by almost a third in the first quarter of 2015, with extremely large block trades seeing a spike.
The institutional investor crossing network said EMEA average execution size reached $1.64 million in Q1, up 31% year-on-year.
Very large trades, described as mega-blocks by Liquidnet and amounting to $10 million or more, were a key driver behind the increased average execution size, with trades of this size increasing by 56% in 2014 year-on-year to 625 worth $11.1 billion. During the first quarter of 2015 the trend continue, with mega-block trading up 17% quarter-on-quarter.
The average daily principal traded on Liquidnet as a whole increased by 26% from Q4 2014 to Q1 2015.
Mark Pumfrey, head of EMEA at Liquidnet, said the figures were indicative that investors are already starting to change their trading behavior ahead of MiFID II, which will make it more difficult to make smaller dark trades and increase demand for large blocks.
The focus on execution quality has become increasingly important to institutions under new FCA and EU-wide rules on best execution,” Pumfrey explained.
“The buy-side are looking at more sophisticated venue analysis and TCA to review execution quality from venues. Our business model, aligned interest and ability to deliver execution performance is a major reason for our continuing strong growth in Europe.”