Stellar Management Team to Grow Neutral Service that Blends Technology and Trading Desk Oversight for Optimal Matching and Best Execution
NEW YORK, NY, September 23rd, 2002 â A distinguished group of industry leaders have joined to create Harborside+, a new model for confidentially attracting and matching large block equity indications of interest (IOIs). The newly launched and completely neutral service opens up the greatest available pool of liquidity of large block equities by including traders from both the buy- and sell-sides, and combines the power of technology with the flexibility of an experienced trading desk.
Approximately 70 firms have been actively piloting Harborside+ over the past several months, including Boston Partners, Cadence Capital Management, David L. Babson Funds, Heartland Advisors, Munder Capital Management, Northern Trust, Pioneer Investments, The Boston Company and William Blair Asset Management.
"Finding the other side of a large block without causing market impact is a major concern for traders and portfolio managers; our service addresses that problem," said Harborside+ President and CEO, Robert C. Hall. Mr. Hall brings to Harborside+ more than 30 years of experience in high-profile positions, including founder and first CEO of Securities Industry Automation Corporation, executive vice president of the New York Stock Exchange and as Thomson Financial's first CEO.
Concurrent with its launch, Harborside+ announced the completion of a major round of financing led by Commonwealth Ventures and Mellon Ventures, and participation from NeoCarta Ventures and numerous individual investors.
Harborside+ melds the best of technology and human intervention so that buyers and sellers can find each other and successfully complete a transaction quickly, efficiently and without market disruption. Traders submitting IOIs to Harborside+ only indicate side (buy or sell) and symbol. Unmatched IOIs are not seen by anyone, including the Harborside+ trading desk. Buyer, seller and Harborside+ trading desk are electronically alerted once the system finds a match, whereupon the service switches from technology to human expertise. The Harborside+ trading desk assists counterparties in finalizing the transaction,
through phone-based communication that keeps the identities of the buyer and seller confidential. Harborside+ is not an ECN or an ATS.
"Trading large blocks effectively is more an art than a science," said Munder Capital Management Director of Equity Trading, Dennis Fox. "Technology alone won't solve the difficult trades, and that's why Harborside's trading desk plays an important role." An investment management firm ranked in the top 6% of money managers worldwide, Birmingham Michigan-based Munder Capital has nearly $31.3 billion in assets under management.
The technology underpinning Harborside+ is utilized as an enabler for pre-qualifying buyers and sellers of size: IOIs start at a 25,000-share minimum (the service is averaging 70,000 shares per trade). IOIs may be submitted to the Harborside+ central server in several ways: a firm's order management system via an application interface jointly created by Harborside+ and Macgregor (that supports Macgregor and other OMS providers including Eze Castle, Charles River Development, LongView and Decalog); a Web-based GUI developed by Harborside+; direct FIX connections; links with FlexTrade Systems, Triad or Tradeware; or by phone to the Harborside+ agency desk.
"Our neutral trading desk headed by Vice President of Trading, Mike Earlywine, an early member of ITG/POSIT, is in place to see that trades happen in the most efficient manner for both parties," said Mr. Hall. A blended approach of technology and live support is deemed most effective for successfully trading blocks, and especially in negotiating for larger sizes, accommodating conditional requirements and step-out trades. Trades are executed by Harborside Securities, a totally independent registered broker/dealer.
Apart from its unique combination of automation and live trading desk support, Harborside+ is also distinguished on a technology cost basis. Easy to install and access, the essentially plug-and-play service is designed for rapid distribution to a large network of traders, requiring no costly IT support, installation of a file server or dedicated lines to the client site.
Harborside's IT and operations are headed by Seth Gelberg, vice president of technology and CTO. Mr. Gelberg's experience includes work for the American Stock Exchange and NASDAQ, as well as positions with Oracle Corporation, Market Axess and Refco Group. Harborside's management team is expanding, with the recent hire of Michael S. Cashel as chief operating officer.
As part of the launch, Harborside+ management is emphasizing its differences from current matching services. "There are a number of services operating today that excel at small trade sizes, or offer all electronic matching and execution. Harborside's focus on large block executions that are negotiated through an experienced desk fills a need for institutional traders, particularly in today's trading environment," said Harborside+ Vice President, David Leone. "We envision Harborside+ flourishing quite successfully, in tandem with other services." Mr. Leone has 14 years of experience in the institutional equity marketplace, with senior management responsibilities at firms such as Thomson Financial and Javelin Technologies.
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