Liquidnet and Abel Noser Solutions announced the pilot of Portfolio Manager Profiling. The model, when incorporated into Liquidnets Virtual High TouchNext Gen algo suite, links historical trade and TCA data with the portfolio managers decisions to create a distinct profile for each participating portfolio manager. These profiles are then factored into determining a suggested algo trading strategy via Liquidnets Algo Ranking Model (ARM).
A portfolio managers tendencies have always influenced a traders execution strategy but being able to consistently replicate a profile pattern used to be a challenge, said Peter Weiler, President of Abel Noser Solutions. But by analyzing a clients TCA data, we can now discover any persistent patterns that are statistically significant. With Portfolio Manager Profiling, Liquidnet pulls that analysis into its Algo Ranking Model to rank suggested execution strategies that are aligned to that PMs preferences.
Buy-side traders are increasingly turning to smart execution tools like Liquidnets Algo Ranking Model to help support their trading decisions, said Rob Laible, Liquidnets Global Head of Equity Strategy. A PMs tendencies are often nuanced, but could have a significant impact on the execution approach a trader takes. Being able to use technology to more accurately pinpoint those tendencies is a powerful addition to a traders toolkit.
Portfolio Manager Profiling is currently being piloted viaLiquidnet Labs, Liquidnets virtual innovation hub that showcases the companys latest products and technology. Buy-side firms who are interested in being part of the pilot should contact their Abel Noser or Liquidnet representative directly.
Launched in 2016, Liquidnets Algo Ranking Model (ARM) generates an extensive profile of an order before ranking Liquidnets Next Gen Algos according to the traders execution objectives. Once the trader has made a selection, the model quantifies the factors that drive the ranking and adjusts its calculations in real time according to changing market and stock conditions. If the top-ranking algo changes, the trader is notified automatically. ARM is currently available in both the U.S. and European markets.