Liquidnet, a technology-driven agency execution specialist, announced on Wednesday that it has partnered with a brokerage company, TP ICAP Midcap, which specializes in the European Small and Mid-Caps (SMEs) sector.
Due to the newest partnership, both companies want to boost the block liquidity opportunities for local SMEs using their client network, broad expertise, and technology.
TP ICAP Midcap and Liquidnet Join Forces
This partnership corresponds with Liquidnet's goals to address complex liquidity and execution issues the company's members face. It also follows the acquisition of Liquidnet by TP ICAP in 2021, highlighting the synergistic nature of the two companies and the advantages they can offer to their clients.
Chris Jackson, the Global Head of Equity Strategy and Head of EMEA Equities at Liquidnet, commented on the persistent challenge many asset managers face when finding block liquidity in small and mid-cap names. He noted that this issue often extends beyond merely "matching SEDOL codes in a venue."
SEDOL, short for Stock Exchange Daily Official List, is a unique identification code comprised of seven characters, assigned to securities traded on various exchanges in the UK, including the London Stock Exchange. They are similar to the US Committee on Uniform Securities Identification Procedures (CUSIP) numbers and help in identifying and tracking securities in the local market.
Jackson expressed confidence in Liquidnet's distinctive global liquidity network and innovative liquidity discovery offerings as valuable assets in assisting their members in tackling this challenge. He anticipates the integration of these capabilities with TP ICAP Midcap's specialized knowledge and liquidity to reduce trading costs for their members further.
On the other hand, Charles-Henri Berbain, the Managing Director at TP ICAP Midcap, pointed out that the scarcity of research hinders investment in SMEs, but the primary concern for numerous asset managers is insufficient secondary market liquidity.
"There is a need to improve secondary market liquidity as a means of boosting investment in SMEs," Berbain added. "We have been specializing in Small and Mid-Caps for nearly a decade and I'm truly excited to collaborate with the Liquidnet team to address this challenge."
TP ICAP and Liquidnet Report Solid 2022 Numbers
TP ICAP Group plc, the owner of TP ICAP Midcap and Liqudinet, published its yearly financial report for 2022 a month ago. The company's revenue experienced an increase of 13.5% (7% in constant currency), surpassing £2.1 billion. Additionally, it ended the year with a pre-tax profit of £113 million, exceeding both the previous year's profit of £24 million and the forecasted profit of £108 million by analysts.
The revenue generated by Liquidnet last year amounted to £325 million, reflecting an increase of 25% and 18% in reported and constant currencies, respectively. In addition, revenues from TP ICAP's global broking operations increased 13% on a reported basis and 7% on constant currency, with a total of £1.25 billion. Within this sum, the FX and money market products contributed £302 million.
In the most recent updates, TP ICAP invested in UK-based FinTech company ipushpull. This strategic investment aims to accelerate TP ICAP's transformation of its core Global Broking business through technology. In addition, the data and analytics division of the company named Parameta Solutions has been approved by the European Securities and Markets Authority to provide benchmark services.
When it comes to Liquidnet, the liquidity data solutions provider has announced the addition of liquidity-seeking alerts to its equities trading application.
