Liquidnet is stepping up its execution ante by starting a new group focusing on growing its next generation electronic trading capabilities and quantitative strategies.
Today, the block trading network and technology provider global institutional trading network announced the launch of its new Execution & Quantitative Services (EQS) group. Global in nature, EQS is headed by up by Rob Laible, who joined Liquidnet earlier this year.
Laible told Traders in an interview that the firm is stepping up its product offerings to provide more new and efficient ways to optimally source diverse liquidity and satisfy best execution objectives. Through cutting-edge technology, a continued focus on block executions and an expanded offering that includes trade advisory and execution solutions, Liquidnet is helping to remove barriers to liquidity and more efficiently manage factors that impact performance.
“Algorithms and execution strategies are only as good as the liquidity they can access,” Laible began. “Our established suite of algorithmic, analytic and quantitative products and services are the only ones that leverage Liquidnet’s deep and diverse pool of institutional liquidity. And as an unconflicted, agency-only broker with expertise in lit, dark, and block markets, we consult with members and clients on ways to access liquidity, navigate market complexities, and access comprehensive analytics, all through an integrated trading platform.
The firm looks to update, and possibly expand, its more sophisticated algorithmic offerings such as liquidity seeking, variable aggressiveness or venue-specific tools. These algorithms offer the best opportunities as the buyside looks for more and better order management and/or smart order routing control to maximize alpha generation.
“When partnering with our clients, they’ve told us that they want a better understanding of how their algorithms work or what’s behind the smart order router’s logic,” Laible said. “They want more control over order flow now as in the past they had outsourced some of that control.”
He added that clients have seen their orders, at times, be routed by the brokers to places that are less than optimal and where trading rebate is highest rather than get the best execution and size.
To this end, Liqudinet and Laible have hired three new professionals to spearhead the New York-based EQS group. The new staff will focus on designing, implementing, and customizing Liquidnet’s suite of execution algorithms and analytics while also providing quantitative research and market microstructure insight. The new EQS team members, all based in New York, include: Scott Kartinen, Roberto Malamut and Amar Vaidya.
Kartinen joined Liquidnet as Head of Algo Development. A veteran with nearly 20 years of experience in quantitative equity portfolio construction, trading analytics and algorithmic trade execution to this role came from UBS Securities where he was Executive Director of Algorithmic Trading. Prior to that, he worked at ITG as Managing Director for Algorithmic Trading Product Management.
Malamut joined as Head of Quantitative Research. A 15 year professional, Malamut brings knowledge of algorithmic modeling, forecasting and trading to the group. Prior to joining Liquidnet, he was a Quantitative Analyst and Designer of Intraday Trading Strategies at Agoge Capital. He also worked at Tower Research Capital, SAC Capital and JPMorgan Chase in a variety of algorithmic trading roles.
Rounding out the trio is Amar Vaidya. A 13 year veteran, Vaidya joined Liquidnet to help build out its suite of algorithms and further enhance smart order routing strategies for the firm’s clients. He came from Shuban Capital where he co-founded a quant fund for equity trading in the U.S. markets. Prior to that, he held product manager roles at Nomura Securities and ITG.
Another area the firm is looking to branch out into globally is trade-cost analysis, Laible told Traders. While acknowledging that like in algorithms that basic TCA tends to be commoditized, some of the more advanced analysis is where Liquidnet hopes to branch out.
“We’re going to focus on pre-trade analysis and look upstream into the trading process,” he said. “We want to help clients answer the questions they have – ‘what do I do with this order when I get it on my desk? How should I best trade an order?'”
Laible’s group also wants to help the buyside in that it is developing trading strategy recommendation models – helping traders focus more on trading and best execution.
And the firm isn’t done yet. Looking ahead to 2015, Laible said his group and Liquidnet will focus on expanding the new offering to all the markets where the firm operates, not just in North America or Europe.
