Macquarie and Kepler Cheuvreux form equities trading and research alliance

Macquarie has scaled back its cash equities business in EMEA and the Americas in response to ‘structural changes in the market’.

Macquarie and Kepler Cheuvreux have confirmed plans to combine their trading and research services in Europe and Asia, as the sell-side continues to battle difficult market conditions in cash equities.

The cooperation agreement will see Macquarie and Kepler Cheuvreux launch a platform for equities programme trading, and cross-distribute co-branded equity research to their client bases in Europe and Asia Pacific (APAC), as of early next year. 

It aims to combine and leverage Macquarie’s equity trading and research footprint in APAC, which currently services more than 1,000 institutional clients with a team of more than 100 analysts, with Kepler Cheuvreux’s European footprint, which consists of 1,200 institutional clients and more than 130 analysts.

“Kepler Cheuvreux has an incredibly strong client franchise in Europe,” said Laurent Quirin, CEO of Kepler Cheuvreux. “The addition of Macquarie’s leading APAC research boosts our research distribution capability to more than 3,000 companies and is a significant milestone in our journey to becoming a global broker in Europe.”

Macquarie confirmed plans in a separate statement to reduce its domestic cash equities presence in Europe, the Middle East and Africa (EMEA), and the Americas regions, to focus on its business in APAC. According to a report from Bloomberg, Macquarie will cut around 100 equities staff in London and New York as part of the new strategy, which the institution described as being “in response to structural changes in the broader market”.

Banks and the sell-side have struggled in recent years against a backdrop of declining equities commissions and major changes in how asset managers consume and pay for research under MiFID II in Europe. Despite being a European directive, the rules have been making waves globally as larger firms opt to adopt the regulation in business operations outside of the region.

“Our partnership with Kepler Cheuvreux will allow us to leverage our respective strengths and complementary footprint in both regions. We’ll both be able to service a broader selection of clients through a unique model offering global program trading, along with high quality European and APAC equities research and distribution,” Dan Ritchie and Adam Zaki, Macquarie’s global co-heads of cash equities, concluded in a joint statement.