Traders Magazine spoke with Mark Govoni, CEO of Liquidnet, which won Game Changer at the 2023 Markets Choice Awards.
How does your company differentiate in a competitive landscape?
At its core, Liquidnet’s differentiation comes from the unique trading experience we offer our Members. We operate an agency model, meaning that it is unconflicted by design and our interests align with those of our Members. The trust we benefit from has been built of over 20 years’ experience in policing our pools and protecting the information and anonymity of our Members.
We started Liquidnet in 1999 as an Equities buy-side network and have remained true to this core since then, while also building on our legacy to deliver market-driven solutions that are differentiated — Equity block trading and deep liquidity search tools, a premium suite of algos, execution Consulting, program and overnight trading, trader-intelligence and decision-support tools and advanced analytics.
In 2015, Liquidnet brought its market-leading innovation to fixed income and quickly established one of the world’s largest pools of buy-side corporate bond liquidity. The platform now connects traders and portfolio managers at several hundred Member firms, offering multiple liquidity-seeking protocols in an environment designed to protect order information and prioritize size.
Today, we empower over a thousand investment firms around the world with solutions to their greatest liquidity and trading challenges. As a leader in block trading, Liquidnet harnesses technology, decades of expertise and the power of our community to provide our Members with a trusted and innovative environment to seize trading opportunities in a multiplicity of asset classes.
What are your company’s long-term objectives and ambitions?
Liquidnet aims to provide the most innovative and simple trading solutions to the most complex of trading challenges. We continue to build out our multi-asset offering, seeking to disrupt the status-quo, and we put the trader at the heart of everything we do with, for example, unique and value-add programs that are designed to bring value beyond the simple execution of blocks. These include Liquidnet’s proprietary Headway and Gateway programs designed to coach and develop our Members so that they may have a greater impact on their trading desks, investment teams, firms, and the industry at large.
What strategy are you using to improve clients’ experience for your business?
We take a technology-first approach. Innovation is in our DNA. It frames how we operate as a firm, with solutions being developed in-house by our dedicated product and technology teams and more importantly, in collaboration with our Members. This creative collaboration is reflected in our innovation hubs, Liquidnet Labs, where Members pilot our solutions. This unique program has a proven track record at providing value. Surge Capture was born out of a Labs session. Six years on, it is still one of the most innovative features in the market. Our unique client model that seeks to have a local presence in your market is another key element. Our unconflicted agency model and the trust our Members place in us is core to our ability to succeed in this area.
What are recent accomplishments for Liquidnet?
We are proud to have achieved delivered a number of product enhancements for our Members in the last year. From an Equities perspective, especially in the Asia Pacific region, we launched our VWAP cross offering. It enables pre-market block trading at the full day VWAP price.
More recently, our European business has partnered with TP ICAP Midcap to increase block liquidity opportunities in European small and mid-caps, aiding Members to discover liquidity in a more challenging area of the market. In the Americas, we unveiled new liquidity-seeking alerts enabling traders to take advantage of liquidity events created by dark blocks, as well as reengage within the Liquidnet network on missed opportunities to trade.
As for Fixed Income, we have introduced disruptive technology to benefit the Primary Markets and our Members who are active in new issue deal announcements and new issue trading. In the past 18 months, Liquidnet Primary Markets has grown to now capture on a daily basis over 80% of EMEA new issues , and has established the first EMEA order book for trading new issue bonds in the grey market and on the break.
What are your current initiatives at Liquidnet?
From a high level perspective we are delivering innovation to the Equities and Fixed Income markets. In Equities, we are looking at new technology-enabled solutions to execute super blocks, which often require more time and specialist skills, and updating our trading application to take advantage of new technologies. Our Fixed Income business is focused on growing our dealer to client offering, major banks are in the process of connecting via API and we’re working with many others to deploy Liquidnet on Fusion screens. We’re also working on a new version of our dealer to dealer protocol, Rebalance.
