Adam Conn, Head of Trading, Baillie Gifford

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 Adam's update midway through 2022:

Six months is a very short period to alter one’s key focuses and there are no change there. Market structure is the one area that seems to keep on giving.

 

We are keen to know who is commercially aggregating what trade data and who are they selling it to. Is it being sold real-time or end of day; is it grouped by investor type or fully anonymised and probably most importantly why are people buying it? We are looking across the transaction chain, from counterpart to trading venue to custodian bank and clearing house. If it transpires bad practise is taking place, we will firstly safeguard client interests by ensuring we opt out and that will be just the start of the conversation. We expect regulators and other market authorities to stamp out such insidious behaviour, regardless who is doing it.

 

We are also preparing for shortened settlement cycles, with one eye firmly on the potential move to T+1 in the US and Canada. Whilst many of the headlines focus on ledger technologies to move securities, there are fundamental changes needed in the payment process. Not every client uses USD as a base currency and making sure US and Canadian dollars are available for settlement is a potentially seismic event that is yet to garner many headlines.

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Which will be the key areas of focus for your trading desk in 2022?

Our number one priority will always be our clients. Protecting their assets, enhancing performance and working out new ways to mitigate any outstanding operating risk. Alongside that is our commitment to people. One way is through learning and development with the need to keep improving. The other is by developing our mental health awareness. There is no greater satisfaction than influencing someone’s life in a positive way and my role as a leader is to set people up for success. If anyone tells you that being a people manager is about getting the most out of people I would stop listening. I am firmly of the opinion it is about getting the best out of someone. I learned that people want to be part of a world they help build. There is no point building a high quality, diverse team if you don’t encourage their participation and actually listen to those opinions. We are also eager to enhance how we better interrogate our data to enhance client outcomes.

 

• Which is the biggest market structure issue in your opinion?

Unfortunately, there isn’t a single pressing issue but more an amalgam of interesting challenges and opportunities. If I was to “mind map” the market structure there is the obvious ongoing debate on equity and non-equity consolidated tapes; the roll-out of CSDR; further potential divergence between UK and EU27 rules; the seemingly never ending obsession with lit trading versus dark and not forgetting the impact of technology-enabled shorter settlement cycles. On top of this there are exciting opportunities to use the ESG umbrella to push through real change which will benefit society as a whole.

 

• Which focus area would you like to see progressed by the end of 2022?

Our industry is blessed with some great thought leaders. With this in mind, it seems incredible that IPO and placing applications, which are some of the largest orders a desk might place, still need to be handled manually. Some banks are recognising the problem from their side and asking clients to enter orders on a portal, but for us, this is still manual. I cannot think of a good reason not to create electronic straight-through processing to take an order from a pre-trade compliance checked buyside Order Management System through to a syndicate desk and for the allocation to be sent back the same way?

 

• How has your firm adapted to working post lockdown?

Our ambition is to continue adding incremental value to the investment process. One of the consequences of remote working was the adoption of messaging and video technology which is bringing Investors and Traders closer together. We also enjoy speaking directly with Baillie Gifford’s clients. Effective dialogue is two-way. We are always happy to explain our processes, share our views and learn from each other. We wish to retain the cultural advantages of being office based, such as those incidental conversations by the coffee machine. Albeit with the flexibility to decide where we work from as either our personal or the general situation dictates. In my opinion, the training of our colleagues is much easier in the office. Finally, we are all incredibly proud of how our firm has supported local communities during the pandemic and the ongoing initiatives to keep doing so.

 

• Top positive tips for your peers and colleagues in trading? Power of #buysidepositivity

Remember how fatigued everyone is and try to keep your team motivated. I believe that once you identify someone who wants to learn, spend your time working on their strengths rather than trying to bash square pegs into round holes. After all, when was the last time any of us hired someone because of their weaknesses?

 

  • Any thoughts about attracting the next generation of talent into trading?

My thought is that the hiring of talent should be a team approach between the hiring manager, HR and any recruitment specialists used. You cannot expect candidates to find you, so be prepared to persuade prospective employees why your firm is a great place to work. Also, if you want a diverse talent pool, offer the tools to help candidates with their applications. This can include guides explaining your recruitment process and on-line interviewing so less privileged applicants may apply without unnecessary time commitments or expense.