After a successful launch in Switzerland and filing strong performances figures in a year marked by low volumes, block trading venue Liquidnet is set to sign up another three exchanges to its institutional dark pool.
John Barker, managing director of Liquidnet Europe, told theTRADEnews.com the firm was close to signing at least two more exchanges in Europe and a major exchange in Asia.
“We continue to diversify our products and service mix, and are increasingly adding additional asset managers to our platform,” said Barker. “We’re very strong in the UK and we have a nice footprint in France, Switzerland and Holland. However, there is great potential and a real growth opportunity for us in wider continental Europe. We are now starting to attract asset managers not yet using us across Germany, Scandinavia and East Europe.”
In July, SIX Swiss Exchange and Liquidnet launched a non-displayed block trading platform designed to allow buy-side market participants to execute large trades with one another in both Swiss and other European equities.
Through the SIX Swiss Exchange Liquidnet Service (SLS), SIX Swiss Exchange members can direct executable block orders to Liquidnet, enabling the liquidity in Liquidnet’s global institutional crossing network to interact with block liquidity delivered directly from SIX Swiss Exchange members.
In the first two quarters of 2011, with the prior block service, SIX traded around €57 million and €58 million respectively. Since connecting in Q3, Liquidnet has averaged approximately €1 billion a quarter in Swiss block equity trades and Barker is expecting to see this grow significantly from such a “modest” beginning in a year marked by historically depressed volumes.
“We launched in July 2011, probably the toughest time possible, and have grown ever since,” said Per Lovén, head of international corporate strategy, Liquidnet Europe, adding that while Liquidnet had only just started in Switzerland, last week’s figures had showed that January was already the firm’s best month so far. “We have on-boarded more than 10% of the exchange’s membership to date, and are continuously increasing this.”
During the year, Liquidnet globally saw a 31% year-over-year increase in volume executed through its trading desk.
The venue led the industry in block trades with an overall average execution size of 48,422 shares in the US – a 3% increase from 2010. In Europe, the average execution size was US$879,845 – the largest of any other trading venue in the region. In Asia, where Liquidnet has connected to 200 of asset management firms, the average execution size was US$1.2 million, up approximately 11% from 2010.