After several months in development, Liquidnet has launched its Fixed Income dark pool in a bid to help facilitate direct, peer-to-peer (P2P) trading of corporate bonds and securities, according to a Liquidnet statement.
The new dark pool will cater to asset managers in North America and Europe, helping create a hub of institutional liquidity in the region. In preparation for the launch, Liquidnet has enrolled more than 120 asset managers, which overall constitutes a sizable concentration of liquidity and assets under management for both high yield and investment grade bonds in the US.
The platform will afford users access to both US and European corporate bonds, including both high yield and investment grade trading options, emerging market corporate bonds, and European convertible bonds. Liquidnet’s fixed income dark pool platform was engineered from its network of asset managers, as well as the firm’s experience in operating a dark pool for institutional equities.
Coupled with the launch, Liquidnet has also announced the expansion of its Fixed Income team, securing former BlackRock executive Chris Dennis to serve as its Head of US Fixed Income Sales.
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According to Seth Merrin, founder and CEO of Liquidnet, in a recent statement on the platform launch, “The fixed income market has been woefully underserved by technology and, as concerns about a liquidity crunch continue to rise, it needs a transformation. With close to 15 years of experience connecting asset managers around the world to solve the unique challenges of institutional equities trading, Liquidnet is uniquely positioned to provide a more efficient trading solution and experience that delivers a critical mass of natural liquidity that minimizes information leakage and maximizes best execution.”
“The corporate bond market is desperate for innovation and improved efficiencies, and we’re starting to see several new trading platforms emerge. Greenwich Associates research found that 80% of investors find it extremely difficult to execute large block trades; as such, a platform that can help ease that burden while not causing a shift in the trader’s workflow is a necessary part of the path forward,” added Kevin McPartland, Head of Research for Market Structure and Technology at Greenwich Associates, in an accompanying statement.
The launch of Liquidnet’s Fixed Income dark pool comes at an interesting time, given the recent fallout facing several institutions – dark pool trading allows buyers and sellers to swap shares under a heightened veil of anonymity relative to traditional stock market trading. The practice itself has drawn the attention of US regulators in recent years given the propensity and vulnerability for misconduct under such loose conditions.
Earlier today, Liquidnet appointed Tony Cheung as its Head of Quantitative Analytics. In his new role as the Head of Quantitative Analytics, Mr. Cheung will be based out of Liquidnet’s Hong Kong branch, where he will be tasked with leading Liquidnet’s analytics in the Asia-Pacific (APAC) region.