While most people fall into a profession, Paul Squires is one of those types who always wanted to be involved in investing and markets, wanted not to be a train driver or astronaut, but a fund manager or analyst.
He got a taste for it during a gap year at SG Warburg. He found himself back there after university when a former colleague who had become a stock dealer – buy-side of the dealing desk at Warburg-owned Mercury Asset Management- told him of a vacancy on the desk and Squires became a trainee UK equity dealer.
Mercury (Asset Management) was a great place to be an apprentice, says Squires, as it had massive penetration of pension fund mandates, with around a third or so of the FTSE 100 companies covered at the time.
He moved to Sun Life (Investment Management), which was acquired by Axa at the same time as a number of other deals. During this time he started trading European equities until 2001 when non-European equity trading was delegated to newly acquired Rosenburg, so he cooked up a cunning plan.
He and two of his other traders left with spare capacity pitched an idea to the head of fixed income about trading for his team of portfolio managers – an offer which was too good to refuse. There was only one catch – not one of them knew anything about fixed income (one had covered FX and money markets, the other Asian equities) but they were happy to learn and the fixed income team happy to help.
Squires became head of trading in 2005, with the primary objective to integrate trading for all the fixed income teams, and in that 10-year period, developed STP, benchmarking of execution across all asset classes, brought US fixed income traders into the global team structure and, most recently, setup an Asian trading – now multi-asset – team.
In recent months, he was given a new role and runs the trading and securities financing department. That’s 57 varieties of trader –24 in London, 24 in Paris, seven in Greenwich and the two in Hong Kong.
With only two traders, rolling out the Asian platform was a big piece of work, says Squires and it has since been given an extension by the regulator to trade all instruments from the Hong Kong desk for fund managers outside of Hong Kong.
“That is something you really need to give you an authentic global platform and you get the best of both worlds – a local relationship with the fund manager to convey specific instructions but local execution and expertise to source liquidity.”
Aside from the obvious implications of regulation, Squires believes there is considerable consolidation yet to come across the board, whether the provision of equity or fixed income research, or even asset management.
Execution is likely to be affected, also, he says, as there are a large number of brokers offering similar services and this consolidation will be further driven home as comprehensive unbundling plays out.
Work in progress
Another healthy shift is the buy-side having to take more responsibility for their choice of execution and justify how they do things, says Squires.
In fact, this is something he is very focused on as co-chair of the FIX Trading Community buy-side working group. He’s also involved with a couple of industry initiatives which he supports as ‘not-for-profit’: Plato for equities and Neptune for fixed income, but rejects accusations they are just talking shops, saying “this is a community of people in the same industry trying to find solutions to benefit all participants”.
“The biggest thing for me is to resurrect investor confidence in our business which, reputationally, has taken a hammering since the sub-prime crisis” says Squires.
“There is a lot of good work being done which doesn’t get reported and there is a lot of genuine appetite to improve the “ethicability” of the way we interact which is easily dismissed as people don’t associate that mindset with capital markets.”
* This article was taken from the forthcoming edition of The TRADE, out in print next week.