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Liquidnet’s Record First Quarter Performance in EMEA driven by Increased Demand for Blocks

Liquidnet’s Record First Quarter Performance in EMEA driven by Increased Demand for Blocks

Liquidnet, the global institutional trading network, today announced a record first quarter performance in EMEA as institutional investors increasingly look to trade in blocks.

The first three months of 2015 was a record quarter for Liquidnet EMEA in local currency. Average Execution Size was $1.64 million, up 31% year-on-year (YoY).  Average Daily Liquidity rose 12% YoY to $22.7 billion, Average Daily Principal Traded was up 26% compared to the previous quarter – driven by Liquidnet’s focus on expanding liquidity opportunities for more than 780 of the world’s leading asset managers.

Mark Pumfrey, Head of EMEA at Liquidnet, said, “We've made a great start to the year in EMEA as institutional investors' confidence has grown as they look to trade in blocks to minimise market impact. Despite their growing confidence, sourcing quality liquidity continues to be top of mind for investors. Our ability to facilitate trading in size, anonymously between buy side institutions, adds significant alpha to fund performance.”

A noticeable trend has been a substantial increase in the trading of mega blocks – defined as blocks of shares worth $10 million or over. In 2014, trades of this size increased by 56% YoY from 400 to 625 and in total $11.1 billion worth of mega blocks were traded on Liquidnet during the period. This continued in the first quarter of 2015, with the number increasing by 17% quarter-over-quarter.

This greater demand for block trading comes ahead of the implementation of volume caps on certain dark trading under MiFID II set to be implemented in 2017, and the FCA’s push for greater transparency through unbundling and best execution.

Pumfrey said: “We are well placed in terms of the volume caps as MiFID II excludes trades that are large in scale from being capped. The vast majority of our trades are executed under the large-in-scale waiver. The focus on execution quality has become increasingly important to institutions under new FCA and EU-wide rules on best execution. The buy side are looking at more sophisticated venue analysis and TCA to review execution quality from venues. Our business model, aligned interest and ability to deliver execution performance is a major reason for our continuing strong growth in Europe.