Sourcing fixed income liquidity: Strategies for a treacherous market

By Cowen Outsourced Trading Team

As market volatility continues to surge, buy-side firms face a daunting set of challenges when executing their fixed income trades. Achieving best execution is tricky at the best of times, but it has become especially hard in a market where liquidity has become extremely scarce.

Seasoned fixed income professionals say they have never seen conditions as difficult as they are today, with market fragmentation still increasing and the prospect of information leakage as problematic as ever.

Against this backdrop, fund managers need answers to some pressing questions. Why has liquidity dried up so dramatically and made it so much harder to execute bond orders? What can be done in response? How can funds take advantage of technology to access the remaining pockets of liquidity in a more effective way? And how can they ensure they have the trading expertise and knowledge necessary to outperform?

To delve into these issues, The Realization Group brought together a group of fixed income veterans and trading technology experts for a panel discussion. Despite the tough environment, there are concrete steps funds can take to ensure their execution strategies deliver. In the panel, Clive Posselt from The Realization Group heard from Joram Siegel and John Orrock, two senior fixed income executives at outsourced trading desk provider Cowen, David Tattan, Managing Director at technology provider TORA, David Berney, founder at Ergo Consultancy, and Daemon Bear, Senior Consultant, Director EMEA at Baker Global Advisory. With more than 100 years of experience between them, they offered unique insights for dealing with one of the thornier problems facing multi-asset-focused fund managers today.

Cowen Finding Fixed Income Liquidity Series

E-book: Finding fixed income liquidity

FINDING FIXED INCOME LIQUIDITY

How traders can source liquidity and execute bond orders more efficiently in today’s fixed income trading landscape.

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Insight Series: Staying one step ahead of your rivals

PART 1 – TECHNOLOGY

In discussion with David Tattan of TORA, we look at the technology challenges that fixed income traders face and the emergence of technology and workflow management tools that have only recently begun to be applied to the fixed income markets.

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Insight Series: Best of both worlds: Where human experience and technology meet

PART 2 – LIQUIDITY

Instead of offering an efficient roadmap to navigate fragmented markets, recent innovation in bond markets has made sourcing liquidity and achieving best execution more difficult. We explore the importance of both relationships and technology to access global liquidity pools.

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Insight Series: Fixed income liquidity: Is outsourced trading the answer?

PART 3 – OPERATIONAL EFFICIENCY

Concluding our discussion on the fixed income trading landscape, David Berney and Michael Broadbent of ERGO Consultancy explore how outsourced trading can help you to navigate the complex fixed income ecosystem, while maximizing overall operating efficiency.

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Interview: John Orrock, Managing Director Fixed Income Outsourced Trading, Europe

FINDING VALUE IN A BRAVE NEW FIXED INCOME WORLD

John examines the fundamental shifts in the way fixed income is traded and how funds can thrive in this brave new world of fixed income trading and how to find better pricing and execution in a market that presents a unique set of challenges.

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Download the e-book to read the complete series.

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