With Valéry Derbaudrenghien, Head of Trading, Asia Pacific, Robeco
You joined Robeco in October 2020. What early initiatives have you completed, or are you are working on?
Optimizing workflow while reducing operational risk is my main concern. This is an effort led jointly with our Rotterdam trading desk, where we share insights and local experiences to challenge our approach of best execution. We have worked on improving our algorithm selection based on certain stock clusters, for example.
A leading focus for the near future is sourcing liquidity in an ever-increasing electronic environment, particularly on our desk which handles larger and less liquid high-touch flow. Finally, as we are a small unit of two traders, I aim to balance adequate coverage of wide trading hours with personal life to keep us alert and engaged.
What is your longer-term vision (say, three to five years) for the trading desk?
Our desk handles mainly high-touch orders, while low-touch orders are sent overnight from Europe. This system has certain advantages, mainly a first line of control in the same time zone as most of the fund managers. It also frees up our time to focus on challenging orders. In the long term, we can envision bringing the whole of Asian trading to Hong Kong, possibly adding headcount and running an algo wheel for low-touch orders. Robeco is also deploying resources in mainland China which we hope will further strengthen the importance of our region.
What is new in technology on your trading desk? Are you seeing high-touch trading move more toward low touch?
We have just deployed FlexTrade as EMS globally to benefit from the leverage one single platform can offer. While traditionally the Hong Kong desk mostly worked with cash desks, our rising star trader and (Markets Media Group) Women in Finance Asia Award nominee Serene Tan has introduced low-touch trading on the desk in the past couple of years. Being myself an avid user of electronic trading solutions from my previous roles, we carefully select our broker destinations and are quite specific on certain customizations that facilitate the workflow.
One must remember how much more risk a buy-side trader takes on when trading through algos rather than leaving an order with a cash desk. This evolution creates a new challenge as indications of interest (IOIs) become few and far-between. I wish more exchanges would tap into the large revenue potential of a centralized crossing platform like we see in Australia. Liquidnet and Posit have proven instrumental to the success of buy-side trading, but an exchange-based solution would allow for more crossing automation.
Finally, brokers must empower their electronic desk coverage, which can take a pivotal role in reconciling low- and high-touch flow.
How has COVID changed the way your team works, and how do you expect this to evolve through 2021 and into 2022? What is your view on flexible working arrangements?
In a small team like ours, flexibility is always welcome. When you can cover New Zealand to India while maintaining reasonable family and social life and not miss a beat, we have come a long way already. If anything, many would argue that the situation has brought employees together, facing the same challenge and coming together through technology. At the end of the day though, nothing beats being together on a desk — not just for practical matters but also for mental health reasons. Working from home takes a toll when imposed for long periods of time. People need that human interaction, camaraderie and validation that comes from working from an office. At this moment we are back in the office, but we keep the flexibility to work from home.
What are your views on recruitment on the trading desk, particularly with regard to women and diversity?
Robeco has always been a leader in sustainability, and encouraging diversity is one of the agendas of the firm. Successfully removing biases is key to base our next hires on merit alone. Every trading desk I worked on has had a good nationality and gender diversity, and this small desk is no different, which is typical in a city like Hong Kong to which people from all over the world converge. My kids have the chance to grow in a multi-cultural environment and they’re an inspiration for parents, who grew up with a more ‘clustered’ mentality.