BidRoute portfolio trading
Published June 4th, 2007
The first automated services for portfolio trading, which launches in London on Monday, is promising to bring a touch of Ebay to the tightly held business of trading baskets of shares.
BidRoute, led by Barry Marshall, a former COO of Gartmore’s investment division, aims to shake-up the $11,000bn-a-year market for portfolio trading by offering a web-based service whereby traders would invite every sellside broker signed up to the system to pitch for a portfolio of stocks, anonymously if required. The brokers could then compete for the business via a transparent, Dutch auction.
The advantage for the traders, primarily large asset managers, is to quickly and efficiently secure the best price for a programme trade. Marshall told FTfm that BidRoute has already had indications from 11 or 12 bid fund managers that they would use the system.
Approximately one-third of all institutional equity transactions are dealt via a portfolio trading strategy. Despite this, bidding for portfolio trades has always been a manual process lacking in transparency. In a climate where both regulators and clients are demanding ever greater clarity, the market needs innovation. BidRoute is the future of portfolio trading. It is the first automated auction service for equity portfolio trades. It offers true best execution by replacing the old labour intensive process with an electronic, reportable, industry-wide platform for portfolio trade bidding.
BidRoute is an independent company founded by three respected professionals, each with an unrivalled pedigree in their respective fields-Julian Lee, Barry Marshall and Kevin Houstoun.
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