Macquarie Looks to Boost Blocks

Macquarie Securities has hired almost a dozen senior-level sales traders and sales staff for its high-touch desk, a move designed to bring in more block trading and leverage the brokerage firm’s extensive research offering.

The high-touch hires will look to bring in additional block business through targeted indications of interest, said Ken Savio, senior managing director and U.S. head of Macquarie Securities. The buyside today wants to trade more discreetly and in size.

"IOIs are becoming a more regular part of the traders’ daily work flow," Savio said. "We are sending out more IOIs now than ever before. The buyside wants to trade blocks and have less market impact, and we see that as our job to deliver."

Brokers in the last year or so have improved the quality of IOIs. These electronic messages sent to the buyside that advertise trading situations are more likely today to represent a real order-a natural-than in the past, when they were often fishing expeditions. Brokers see quality IOIs as the best way to increase their high-touch business.

"The revamping of our IOIs has improved our trading flows," Savio said. "We’ve identified our clients and are listening to them."

That is, Macquarie is now targeting its IOIs to specific investors in a bid to trade more blocks. And so far this year, Savio added, the firm has seen more block trades and overall trading volume rise.

IOIs are only part of the plan at Macquarie. At the root of the strategy are the traders and sales traders, who will leverage the firm’s global research product, Savio said.

So far, the strategy has allowed the firm to inch up the rankings. According to Bloomberg data, Macquarie has climbed from 47th in broker rankings, with 3.01 billion shares executed in 2010, to 45th, with 3.64 billion shares in 2011 after Savio’s arrival. And in 2012 the firm has continued to grind ahead to 44th, despite trading only 2.03 billion shares.

Armed with a quiver full of research, and reach into the C-suite, the firm’s new additions are in place on the New York and Boston trading desks. They have on average more than 15 years of experience. Savio spent almost his entire career at Bear Stearns, where he rose to global head of trading and sales trading. He told Traders Magazine the veterans brought more experience to the desk. Macquarie added new hires without materially adding to its overall count.

Here are the hires:

Michael Cornette has been appointed managing director and head of U.S. trading. Cornette, who has more than 20 years of experience in equities trading, joins from Bank of America Merrill Lynch. He was also co-head of cash trading at Bear Stearns. Robert DeRosa joins as managing director and co-head of U.S. sales trading. DeRosa, also with more than 20 years of experience, was previously an executive director at J.P. Morgan and a managing director at Bear Stearns prior to it being acquired. Nicholas Struk joins as a managing director and co-head of U.S. sales trading. He was previously an executive director at UBS.

These senior appointments will have management responsibility for Macquarie’s U.S. sales trading and trading teams in New York, Boston and San Francisco. Further appointments include seven sales traders for the U.S. desk: three as managing directors, three as senior vice presidents and one as a vice president.

Stephen Sibilia, Jon Jensen and Mark Corcoran joined as managing directors. Sibilia has experience covering mutual, hedge and pension fund clients across multiple product lines. He has held senior roles at Jefferies & Co., Sanford C. Bernstein and Goldman Sachs. Jensen comes from FBR Capital Markets, where he was co-head of trading. He has held senior positions at Bear Stearns, Dresdner Wasserstein and Natwest Securities. Corcoran comes from Lazard Capital Markets.

John Curley, Brad Hoenig and Allen Jordan joined as senior vice presidents. Curley comes from RBC Capital Markets. Hoenig was a director and institutional equities sales trader at RBC and also worked at Lehman Brothers. Jordan joins from Rochdale Securities and has a long-standing network of senior level relationships throughout the industry.

Tarik Turner joined as a vice president and was previously a director of sales trading at Ticonderoga Securities.

In equity sales, the firm hired Khristina McLaughlin and Alexander Martin as managing directors and Tad Nacheff and Jim Isenthol as senior vice presidents. McLaughlin comes from WJB Capital, where she was a director of institutional equity sales. Previously, she worked at Goldman Sachs. Martin joins from Avondale Partners, where he was a director of institutional equity sales. He has worked at Ferris, Baker Watts, and Donaldson, Lufkin & Jenrette.

Nacheff comes from FBR Capital Markets and had been a partner at ThinkEquity, a boutique investment bank. He has also held equity sales roles at Goldman Sachs and Lehman Brothers. Isenthol was most recently director of institutional equities at Soleil Securities.

And while much of the focus recently has been on the high-touch desk and hires, Savio said there are some changes coming to the low-touch desk, run by Damian Hoult, the firm’s global head of execution services, who recently relocated to New York from Hong Kong. While the firm currently white-labels algorithms for clients, it is looking at moving more toward its own proprietary offering, Savio added.

(c) 2012 Traders Magazine and SourceMedia, Inc. All Rights Reserved.