Few names are more synonymous with buy-side block trading than Liquidnet. With an average execution size of 42,000 shares per transaction, and a combined $12 trillion in assets under management among its members, the 12-year-old network certainly has scale and reach.
Launched in 2001 by current CEO Seth Merrin, with 38 members, the network now boasts over 700 buy-side firms and connections to 42 markets as of the end of April 2013. It’s been a strictly upward trajectory for the network, which is one of only three companies to win the same category in the Buy-Side Technology Awards for every year that the program has run.
Any network depends on growth, naturally. After all, people sign up due to pervasive influence and reach, rather than pure niche ability, particularly when it comes to finding the correct means of execution and preferable counterparties for block transactions that simply can’t be executed efficiently or cheaply on the primary markets. It’s not just growth and reach that define success, however, but innovation and a constant sense that the network is heading somewhere, not just bloating. Liquidnet first broke the mold of its buy-side-only focus in 2011, when it opened up anonymous block flow to sell-side firms, thanks to its non-displayed block liquidity platform partnership with SIX Swiss Exchange. That project turned into a big success for the venue operator, and this year, it was expanded by Liquidnet becoming the first block agent on Xetra, the trading venue operated by the German exchange giant, Deutsche Börse. For German stocks, this means that 240-plus Xetra members can now interact with the non-displayed block liquidity on offer from Liquidnet’s asset management members.
In addition, adding new markets in diverse regions has solidified Liquidnet’s hold, with the addition of Turkish, Philippine and Thai equities over the past year. From a technology perspective, the release of the venue’s commission-management tools has made the task of identifying fees and analyzing payments markedly easier for its clients. Continued growth in EMEA and Asia-Pacific has further bolstered its position, and makes it unlikely that Liquidnet’s domination of this category will be challenged anytime soon.
“Liquidnet has changed the way asset managers execute large trades globally, helping them to further drive investment performance for their funds. We also continue to identify additional opportunities for our members to maximize the way they interact with our deep pool of liquidity and take advantage of the value-added solutions that have been developed to solve some of their biggest problems. We appreciate the recognition of Liquidnet’s position as a distinctive and essential partner to the buy-side community.”
—John Kelly, COO, Liquidnet
Bill Murphy, CTO of Blackstone, once again joins the podcast to discuss the private equity firm's new offices, designed to house its innovations team.Subscribe to Weekly Wrap emails