Platform Profile: Liquidnet Fixed Income
Constantinos Antoniades is Head of Fixed Income at Liquidnet.
1. Assess the state of your corporate bond trading platform – what were the primary milestones/accomplishments over the past year?
Since launching the first institutional dark pool for corporate bonds six months ago, Liquidnet’s Fixed Income platform continues to attract critical mass, streamline trader workflows by leveraging OMS connectivity and ultimately, deliver safe and efficient access to institutional sized liquidity. The past six months have shown consistent growth in our client base. We currently have 160 active firms globally, with approximately 350 active users. And after surpassing $1.3 billion in executed trading volume since launch, our average daily liquidity now stands at $7 billion.
2. What end-user/buy-side challenges are you addressing, and how?
Electronic trading plays an important part in addressing the liquidity shortfall created from the retraction of dealer liquidity from the corporate bond market. At Liquidnet, we believe the value of electronic trading and specifically a successful dark pool doesn’t come from technology alone, but rather from the ability of technology to connect buyers and sellers with a layer of information protection not possible using the traditional voice-based over-the-counter market.
3. How would you characterize the future of the corporate bond trading platform business (broadly), and your business specifically?
We believe the dealer system in its current format has probably reached the limit of the amount of liquidity and capital commitment it can provide given shrinking headcounts as well as mounting regulatory, capital, and risk appetite constraints. But additional liquidity in the marketplace can still be uncovered by connecting institutional investors in a way that leverages the network effect and enabling them to exchange institutional sized liquidity with each other. At Liquidnet we remain focused on creating new liquidity opportunities as opposed to recycling liquidity already available to the buy side via other channels. In addition, our 15-year track record in the equities market has established us a trusted venue for the buy side, capable of not only protecting their information but also supervising the behavior inside the corporate bond dark pool to ensure a positive experience for all participants.
The regulator may also modernize rules related to the definition of an exchange.
The firm also reported record emerging markets commission revenue.
Lack of connection between the two markets in China has resulted in poor price discovery and liquidity.
Volumes of sustainable debt surpassed $1.6 trillion in 2021.
The consolidated quote system for corporate bonds has raised funds to expand outside the US.