Liquidnet Expands Quant Team in Europe

Terry Flanagan

Liquidnet, the institutional trading platform, has made a senior hire in Europe for the execution and quantitative services team it launched last December.

Rob Laible, global head of EQS at Liquidnet, told Markets Media: “A focus for growth is quantitative analytics as we are investing in this space while other firms have pulled back since the financial crisis.”

In December last year Liquidnet launched the EQS group with three hires in New York to provide its network of more than 770 asset managers with new and more efficient ways to source liquidity in its own pool as well as at other external venues. The team is responsible for designing, implementing, and customizing Liquidnet’s execution algorithms and analytics and providing quantitative research and advice on market microstructure.

The firm has hired Chris Jackson as European head of the EQS Group. He joins from Citi where he was head of execution sales for Europe, Middle East and Africa. Before Citi, Jackson spent twelve years at Merrill Lynch where he was latterly head of sales across program, transitions and electronic trading.

Jackson said in a statement: “As asset managers begin to look even more closely at execution quality and services, there has never been a better time to join Liquidnet which enables its members to execute large block trades in the most efficient way.”

Laible said Liquidnet will continue to make strategic hires for the EQS team.

“We are investing in Asia and have representation in Canada so we are already global but that presence will become even more robust,” he added. “Our goal is to build a well respected quantitative platform and we are investing in products and services to achieve this.”

Liquidnet has traditionally been known as a dark pool for asset managers to trade large blocks of shares but the EQS team will offer new products and analytics to achieve best execution.

Laible said: “Liquidnet’s edge in algos is that our clients can start out using our dark passive algos which allows them to search for block liquidity in our pool first. One of our strengths is that our trading desk can help the client manage the transition from passive algos to lit markets as the day goes on.”

Although Liquidnet is better known for equities, last year it acquired bond trading platform Vega-Chi as the fixed income market becomes more electronic and banks have become less willing to provide liquidity due to capital constraints.

“Traditional best execution is changing in fixed income and Liquidnet expects to be in the forefront of this,” Laible added.

Liquidnet’s expansion in Europe comes as the latest Bank of America Merrill Lynch fund manager survey found that preference for European equities is at a record high.

The BofA Merrill Lynch fund manager survey for March said today that global investors have significantly pared back US equity allocations as they expect the US Federal Reserve to raise rates in the second quarter. A net 19% of global asset allocators are now underweight US.equities, the most since January 2008.

A net 63% of respondents said Europe is the region they would most like to overweight in the next 12 months, the highest since the question was first asked in 2001.

Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research, said in a statement: “Bullishness towards European stocks has reached uncharted territory.”

In addition, assets invested in exchange-traded funds and products listed in Europe reached a new high of $494.8bn at the end of last month, according to consultancy ETFGI’s monthly ETF and ETP global insight report.

Last month ETFs listed in Europe had net inflows of $12.5bn, just behind the record U$14.3bn of net inflows in January 2015. Equities gathered the largest net inflows pf $6.7bn, followed by fixed income with $4.1bn, and then commodities with $1.2bn.

Deborah Fuhr, managing partner of ETFGI, said in a statement: “Investors allocated the majority of net new assets to equities as the US market rebounded from a difficult January to end February with both the S&P 500 and the Dow up 6% for the month.”

Featured image via D0llar Photo Club

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