Banks already lining up big hires for 2016. What you should know about Goldman’s female MDs

Do you have a new job lined up for 2016? No? You’re late. 43 days before the end of the year, and banks are already sorting out who’ll join them in early January.

UBS, for example, has reportedly recruited four technology investment bankers. Paul Crisci, Jason Auerbach, Jasson Cohen and Chris Montgomery, will all join the Swiss bank’s San Francisco office from Jefferies sometime in the first quarter. They have, we suppose, been very well compensated for the bonuses they’re leaving behind.

Despite the lateness of the year, Nomura has also been doing some hiring. The New York Times says the Japanese bank has space to increase headcount in its midtown Manhattan office by a further 50%. For starters, it’s already hired six senior bankers across equity capital markets, leveraged finance, and industrials M&A. Admittedly, most of them are already in situ, but the most senior – Mark Connelly, Nomura’s new head of ECM for the Americas – won’t turn up until the end of November, which will coincide with the post-Thanksgiving wind-down and the pre-Christmas jollification, suggesting he might as well have joined in January anyway.

Separately, the Evening Standard was granted an interview with some of the new MDs at Goldman Sachs in London. We learn that they are, ‘ultra-polished’ and that there are, ‘certainly no signs that they’ve spent the previous evening on the Bolly to toast their success. Hair is blow-dried; bodies gym-honed. Nobody touches the biscuits.” They’re also cosmopolitan (only two of the six are Britons), mothers, and occasionally married to fellow finance professionals. “It’s possible for both partners to have high-intensity jobs,” says Latifa Tefridj-Gaillard, head of sales in Goldman’s UK pension strategic group. “- You just have to be very organised.”

Find out more about Algomi Investment here.


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IPC Systems Unveils Connexus Cloud Service For Global Clientele

IPC’s latest cloud service helps connect its global clientele into a secure and transparent network.

IPC Systems, an international provider of specialized communications and managed network-as-a-service solutions, has launched its Connexus Cloud service, helping integrate IPC’s global clientele with up to 6,000 market participant locations, per a recent IPC statement.

The Connexus Cloud solution will aim to deliver an augmented lineup of IPC’s product suite, which includes a slate of communications-as-a-service as well as various information management compliance. The launch is important for market participants as it helps allow its membership constituency to engage in secure informational exchanges, with an emphasis on mitigating risk.

IPC also has plans in the pipeline to unveil a additional Connexus Cloud partners and products throughout 2016. Presently Algomi has signed on to become one of Connexus Cloud’s first partners.

According to Neil Barua, Chief Executive Officer (CEO) of IPC, in a recent statement on the launch: “Connexus Cloud is the foundation of IPC’s strategy to move the financial markets into a new era with an intuitive, robust and all-encompassing cloud delivery model. Its secure, compliant high performance design is purpose-built to be a new standard. We are continually expanding our collaborative ecosystem of data and voice resources exclusively for the financial markets community.”

“Financial institutions continue to migrate from on-premise solutions to embrace cloud-based models for infrastructure flexibility. The on-demand access Connexus Cloud provides to our expanding portfolio of IPC and IPC-certified partner products, services and solutions, will foster a growing, dynamic community and the next wave of industry advancements,” Mr. Barua added.

The launch of Connexus Cloud follows just one month after the release of IPC’s FX Hub, its platform designed to enhance trade lifecycle capabilities and services. FX Hub also acts as a low latency, co-located performance solution that was engineered to help reliably source liquidity, offering a variety of streamlined functions for market participants.

Algomi unveils Synchronicity SaaS

Algomi is rolling out its sell-side engine, Synchronicity, as a Software as a Service (SaaS) solution. This has been developed in collaboration with banks to enable improved liquidity in the global corporate bond markets for the widest possible group of dealers. It delivers an actionable Virtual Balance Sheet and the same range of features available on the installed version of the platform, and connectivity with buy-side clients through Algomi’s Honeycomb network.

Alongside the SaaS roll-out, all Honeycomb network participants will now have access to open source FIX connectivity. Usman Khan, Algomi co-founder and CTO, comments: “These developments are further proof of how Algomi is continuing to bring real innovation to fixed income markets for both the sell-side and buy-side. The SaaS solution greatly lowers the time required for on-boarding, reducing the time to market. This, coupled with the greatly reduced requirement for internal resources, means that Synchronicity SaaS removes the challenges of technology adoption, while enabling banks to maximise their effectiveness in the market. Our customers will also now be able to have true bi-directional FIX connectivity in a secure and confidential way that goes beyond the simple point-to-point connection provided by FIX alone.”

Algomi Benefits From Cloud Adoption

Stu Taylor, chief executive of Algomi, said banks have become more comfortable using the cloud allowing the fintech company to provide its bond information network as a software as a service offering.

In August Algomi launched its sellside platform, Synchronicity, as a software as a service solution. When Algomi launched it built internal networks for banks to connect together staff who could help transact less liquid corporate bonds but the firm has since added asset managers to its Honeycomb network so they can easily and quickly find the best bank to execute large trades.

Taylor told Markets Media: “Banks have become increasingly embracing of cloud solutions. We use Amazon web services and a few years ago that would not have been palatable.”

Software as a service means banks need to devote far fewer internal resources, and reduced fixed costs, in adopting Algomi as the project moves from a capital to an operational expense. Each bank is on a separate encrypted server stack managed by Algomi to meet international data standards on a secure scalable service hosted by Amazon.

“The SaaS offering has been received very enthusiastically and contract negotiations in the double digits have begun with banks,” added Taylor. “Installation used to take four to six months but now we can onboard banks in approximately four weeks.”

Brad Bailey, research director, Securities and Investments Group, at consultancy Celent said in a report last month that the cloud is the most profound disruptor in allowing the fintech revolution to occur in capital markets.

“Cloud enables a lower cost of failure, shifting capex to variable costing, and demand based usage,” said Bailey. “More importantly it allows better data models for analytical insight across the capital market value chain.”

Bailey continued that larger investment banks and brokers are investigating, planning, and considering the risk, security, encryption, regulatory, privacy, and cost implications for moving certain workloads to outsourced infrastructure models.

“The “We will never use the cloud” attitude of three years ago has moved to the maybe camp as key vendors become more focused on the particular needs and regulatory restrictions of capital market firms,” added Bailey.

The Celent report said the ability of fintech firms to bring innovative business models increases if they can deploy cloud-based technology to  increase their speed to market speed and use new APIs to collaborate more easily with both incumbents and clients.

Taylor added: “This technology was not available two to three years ago and it is a real innovation that we have been able to take advantage of.”

The Desk’s Trading Intentions Survey 2016 found that the platforms currently most effective at sourcing liquidity were Bloomberg and then MarketAxess as a close second, followed by Tradeweb, Algomi and then Liquidnet. The Desk survey had 70 responses from North American, European and emerging market credit desks spread across 34 investment managers, with an aggregate of €15.4 trillion in assets under management.

Liquidnet, Algomi and Neptune were also first, second and third choice for the second year running as the platforms that traders plan to use. The Desk said: “It is worth noting that many of the most successful models are not those which aggregate actionable liquidity. The services provided by Algomi, Neptune and B2SCAN all focus on the use of information to support where to trade rather than offering a venue to introduce the platforms as with request for quote systems, or any auction or order book.”

In September Algomi said it had more than 200 fund managers on its network. There were more than 10,000 buyside indications of interest, with an average size of more than $7m, covering $75bn of live buyside volume.

Vanguard’s Five Point Plan for Fixed-Income Trading

Buy-side giant Vanguard has recommended five key points to improve the adoption of electronic platforms and evolution of the fixed-income market. John gives his view on the asset manager’s counsel.

Much has been said and written about the state of fixed-income trading in recent years, particularly the lack of bond liquidity that so much electronic effort is aimed at resolving.

Earlier this year, I wrote two features on the fixed-income market, looking at both the alternative options that were coming to the fore with a more collaborative focus and how electronificaiton had yet to catch on in the same way as it has in the equities market, due to market structure and the difference in the nature of the product.

This week, asset management giant Vanguard published a report that laid out five key recommendations to jump-start the adoption and evolution of electronic bond trading practices. The report says that while the bond market structure is evolving to facilitate electronic trading and meet new challenges, the liquidity issues that have historically plagued the space are not as bad as all that.

Vanguard’s key recommendations centre on the following five points:

  • Limit trading fragmentation
  • Further develop all-to-all networks
  • Integrate trading and order management systems (OMSs)
  • Provide greater price transparency
  • Protect information leakage

These are all very valid and sensible points, but it’s nothing new either. Price transparency has long been a stumbling block when it comes to bond liquidity and it was a major driving force behind the emergence of those alternative trading models, such as Algomi. However, new regulation coming down the pike in both Europe and the US is aimed at improving post-trade fixed income trade data, which should, in theory, lead to improved price transparency.

Similarly, protecting information leakage has been a long-standing issue in bond trading, sometimes exacerbated through the practice of all-to-all trading. While Vanguard also promotes the further development of these all-to-all venues, for the overall benefit of the market, there is sometimes a trade-off here between transparency and better pricing.

The sheer number of electronic trading platforms and venues in the market mean it’s no surprise to see Vanguard also pushing to limit trading to a smaller number of venues. It makes sense to attempt to concentrate liquidity onto a select number of platforms, but consolidation is still likely to occur for many of these providers, so it’s something that’s probably going to occur naturally anyway.

The last point was around the further integration of trading and OMSs. While the practice is fairly widespread in equities, it has yet to catch on in the fixed-income market. This would be much harder to achieve, because while there are some venue operators that provide such functionality in the fixed-income market, it would take a concerted effort from all players involved to implement functionality that would enhance efficiencies when seeking out possible bond trades.

Projects like Neptune have already begun work in this space to establish a hub for the exchange of pre-trade bond axes (intentions to buy or sell a security) and standardise inventory formats, but much more would need to be done.

Algomi’s Voice Activated Capability

Algomi is looking to develop a voice enabled capability, as the network for matching bond buyers and sellers said its platform could possibly be developed for difficult trades in other asset classes.

Algomi was launched in 2012 to build a social network for the corporate bond market and recently celebrated its three-year anniversary. When Algomi started it built internal networks for banks to connect together staff who could help transact less liquid corporate bonds but the firm has since added asset managers to its Honeycomb network so they can easily and quickly find the best bank to execute large trades.

Stu Taylor, chief executive of Algomi told Markets Media: “So far 11 banks and 70 buy-side firms have signed up with more in the pipeline. We expect to have 100 buy-side firms on board later this year.”

In addition to adding clients, the firm has expanded geographically. Algomi launched in London and opened its American operation in 2013. At the beginning of this year the firm said it had moved to a larger office in Union Square in Manhattan and planned to triple staff. In January Algomi also recruited Jesper Bruun-Olsen from Tradeweb as head of Asia-Pacific operations to establish a presence in Singapore and Hong Kong.

“Algomi is looking at a number of exciting developments including voice enabled capability,” added Taylor. “Electronic trading has worked for commoditised bonds but we want to drive efficiency for more sophisticated relationships.”

Stu Taylor, Algomi

The Desk’s Trading Intentions Survey this year found that 4% of users were already using Algomi but the second highest proportion of respondents, 54%, planned to move to the platform. A third of respondents expect to be using Algomi in five years time. The survey was conducted across 24 buy-side firms with $12.2 trillion in assets under management based in Europe and the US.

The study said: “Of the information transfer platforms designed to facilitate liquidity discovery, Algomi and Project Neptune are currently frontrunners.”

Respondents were asked to choose from 50 platforms which include those that assist pre-trade, such as Algomi, alongside traditional venues that match and execute orders.

Taylor said: “Algomi is not just blotter scraping for a list of intended trades. Our research has shown that in fixed income less than 1% of buy and sell trades arrive on the same day.”

The Honeycomb network allows buy-side firms to easily interrogate the data provided by banks to determine who is likely to be the best counterparty for an individual trade and provides a record of why a broker has been chosen, which is important for new regulations in the European Union which will require asset managers to provide more evidence of best execution to their clients.

“MiFID II does not specify how best execution has to be evidenced,” said Taylor. “Algomi provides an audit trail that you have systematically surveyed the market before deciding on who is likely to provide the best execution.”

MiFID II covers a range of asset classes and it is possible that a platform like Algomi could interrogate data in assets apart from fixed income.

“The power of information is transformative and we are only beginning to discover how smart our data is,” Taylor said.

Taylor added that the platform could be developed to work for non-commoditised trades in other asset classes such as the rates space which had experienced liquidity issues in recent weeks, but also structured notes or even commodities. He said: “We are not a start-up anymore and are rapidly reaching a state of influence in the market.”