Head of Trading: EMEA Equities
and Henley Fixed Interest at Invesco
Which will be the key areas of focus for your trading desk in 2022?
The main goals remain for H2 as at the start of the year. Enhancing data analytics is not a single event but an iterative process as insights are gained. Add dynamic markets and evolving regulatory influences and it is easy to see why so much of our focus (and resourcing) is around data engineering, curation and coding.
The ultimate goal of globally coordinated and harmonised workflows has advanced, with flows from our ETF business in the U.S. for example now being sent to the regional trading desks for the first time. This is not simply a question of routing orders to the appropriate traders but also ensuring all post trade aspects are aligned.
Supplementary to this is the need for traders to adapt the way they learn from the insights that our proprietary research provides and so we have removed the distinction between single stock and program trading – with associated responsibilities. This was a major focus for us in H1 and has elevated the skill sets for all the traders, along with providing greater bandwidth to absorb varying flows.
Aside from the execution performance we continuously check that we are providing quality market insights to our internal (and external) clients.
The dialogue and interaction has developed particularly with the investment teams in other regions where it is important to cultivate effective relationships.
One component of this, that we have added as a specific goal for H2, is to assign sector responsibilities to traders. This does not have to clinically translate to execution of certain orders but it adds focus to market intelligence, relationships with market makers and reflects the organisation of most of our Portfolio Managers (who provide sector analysis). Furthermore it adds specialisation within the team when discussing performance, flows and market views.
Which is the biggest market structure issue in your opinion?
It remains the timely provision of a consolidated tape (CT) for bonds, equities and ETFs.
The recent publication of the European Parliament’s (EP) draft report (in response to the European Commission’s MiFIR/D review published in November 2021) is very encouraging in its detailed proposals and its scope is wide but I think the CT is really the thing that will have the greatest impact on trading in the coming years. What concerns me from here is the time that it is likely to take to deliver on such a framework, noting for example that bonds are (perhaps rightly) being prioritised, meaning that equities and ETFs (being considered the same instrument type which continues to baffle me) will very much have to wait in line for their turn for consideration.
The parliamentary mechanism for validating or amending the proposals is a slow one – and this is after 8 years of explaining that the CT should be at the heart of the transparency roadmap that was drawn up after the Global Financial Crisis (GFC).
That said there will hopefully be some quicker adoption of the more obvious and easier to implement suggestions and we should recognise the fact that regulators have clearly listened to the buy side in getting to this point (so hats off to all of those who have invested the time and effort to process).
Which focus area would you like to see progressed by the end of 2022?
I think the automation of IPO/ECM processes is closer and I hope that we will see that advance in H2 (for both equities and bonds). The appetite from the buyside for an innovative operational solution is well established and there now seems to be enough coordination between market participants to deliver something meaningful. Let’s hope M&A picks up before the year end to give any new platforms the momentum to become mature in time.
How has your firm adapted to working post lockdown?
Both our UK offices are now fully open and – as naturally gregarious creatures - we’re all pleased about that! Where we have settled is a more permanent application of the ‘new normal’ schedule that was devised during the lockdown which has an expectation on traders to be in the office three days/week, with two days as optional. I think giving employees some flexibility is invaluable to their mental health and, by consequence, productivity when the workload requires a more intense (or equally creative) focus.
Our team recognises the benefits of WFH at times but in person meetings and discussions are also more purposeful.
Thoughts about attracting the next generation of talent into trading?
Creating the right working environment and how you approach recruiting is key to attracting the next generation of trading talent. For example when hiring for trading roles we no longer just look for candidates with trading experience, we often target graduates (and we’d love to include school leavers in this as well). This opens up the pool of candidates and enables us to interview people from a diverse range of backgrounds who may not have considered trading as a career for themselves, but we can see they have the potential and ambition to progress within this field. Also, having a great wealth of knowledge and experience within our trading teams gives us the opportunity to mentor, nurture and train new and upcoming talent directly from within the business.
We also use advanced language insights software (Textio) for our EMEA adverts and job descriptions which helps us to mitigate unconscious bias and means we can articulate what we need in a way that is inclusive and welcoming to all applicants.
Top positive tips for your peers and colleagues in trading? Power of #buysidepositivity
I really want to quote Tom Cruise in Risky Business but I don’t think it translates well to this forum (!) so perhaps I’ll borrow from another film (Strictly Ballroom): ‘A life lived in fear is a life half lived’.
By that I mean as a buy side trader - I would have been guided to ‘just manage the downside’ in any decision making, now I think the empowerment is to be proactive and take views (don’t limit the upside).
You may not always be right but even the best traders call the market wrong. Furthermore I think good Managers (and cultures) are increasingly authentic in welcoming challenging thoughts and comments (if constructive).