Liquidnet launches primary bond market offering as buy side demands innovation

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Block-trading specialist Liquidnet is launching into the primary market technology space. Its new electronic solution, Liquidnet Debt Capital Markets (DCM), is focused on new issue workflow. Inefficiency in primary bond markets has been a major issue for buy-side traders this year, who are occupied by the time-consuming, manual processes currently needed to handle the non-standard information flows from sell-side dealers.

Cathy Gibson, head of dealing, Royal London Asset Management

“There has not been enough focus on innovation in the primary space over the course of the previous decade, it is time to bring more technology into the space to enhance efficiencies across the industry,” said Cathy Gibson, head of dealing at Royal London Asset Management.

The Liquidnet offering is scheduled to launch later this year and will be embedded in the firm’s fixed income trading platform, bringing together the primary and secondary markets to Liquidnet’s members. It follows a two-year validation and workflow design process in close partnership with big asset managers and syndicate banks across Europe.

Liquidnet DCM aims to offer last-mile connectivity via order management systems (OMSs) to the buy side for syndicate banks, to help streamline the manual process in the corporate debt primary market which has seen record new issuance of US$2.6 trillion during the first half of 2020.

Andrew Munro, global head of fixed income trading, Janus Henderson.

“It is important for any primary market solution to be integrated with the OMS platforms used by the buy side in order to deliver the necessary efficiencies. We welcome solutions that help stitch together the currently fragmented workflow,” said Andrew Munro, global head of fixed income trading at Janus Henderson.

Rival offerings are also ramping up in 2020. DirectBooks, which is backed by a syndicate of banks and several investment firms, plans to launch in Q4, while IHS Markit has integrated its Investor Access tool into its thinkFolio investment management platform in order to connect directly to its OMS traders, portfolio managers, and syndicate banks, covering all aspects of the new issue life cycle: from announcement and deal updates, to OMS-linked collection of orders, allocation, and pricing.

Carl James, global head of fixed income trading, Pictet Asset Management

“The fixed income primary market is in need of automation to increase the efficiency of the debt issuance process for PMs and traders. Technology can help with this,” said Carl James, global head of fixed income trading at Pictet Asset Management.

Constantinos Antoniades, Liquidnet
Constantinos Antoniades, global head of Fixed Income, Liquidnet

Constantinos Antoniades, global head of Fixed Income at Liquidnet says, “Our solution will provide an OMS-connected workflow, making the process of managing multiple new issues by asset managers more efficient, more automated, and less time-consuming. We are committed to providing the market with an open and interoperable industry solution that is available to all clients and banks in Europe and the US, and we look forward to working with other firms for the benefit of the industry”.

Christoph Hock, head of multi asset trading, Union Investment

“We are pleased to see key developments taking place in the space as buy-side trading desks need to use smart technology to streamline the new issue management process. Equally important, it is great to see solutions that have been crafted with close co-operation and guidance from the asset management community in Europe,” said Christoph Hock, head of multi asset trading at Union Investment.

At launch, Liquidnet DCM will cover new European corporate investment-grade, high yield and emerging market bond issues and will be available to all Liquidnet Fixed Income Members and syndicate banks.

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