ITG, Instinet Beef Up Operations in Asia
Within days of each other, ITG and Instinet both announced major executive appointments overseas. ITG announced "significant investment in staff and infrastructure" to grow its Asia Pacific trading operations and installed two senior managers to oversee the effort. Meanwhile, Instinet announced three appointments to help boost its Asia and Latin America electronic trading business.
According to Dushyant Shahrawat, research director for the Securities and Capital Markets practice at TowerGroup, the moves are a clear signal that firms recognize the opportunities for electronic trading overseas. "The definition of 'international' has changed over the last five to seven years. Today it doesn't just mean Europe -- it means Japan, China [and] India. ... There's a much larger portion of revenue for broker-dealers to be had overseas," he says. "The increase in trading taking place in New York is only a fraction of the amount it is growing overseas. It's increasing dramatically, and the trend is going to continue."
To meet the growing overseas demand, ITG has appointed Gabriel Butler director of sales and trading in Hong Kong and Michael Corcoran director of sales and trading in Sydney. Butler previously was SVP of algorithmic trading in the U.S. Corcoran makes the move from the company's Hong Kong office to Sydney.
Instinet promoted Christian Chan to head of electronic trading in Asia, based in the Tokyo office, while Ali Shakhori was brought on to head up the company's Asian DMA group. In addition, Edward Sares will head up Instinet's Latin America market entry as a sales trader on the international desk in New York.
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TowerGroup's Shahrawat says ITG and Instinet are wise to move positions overseas. "Electronic trading has historically advanced more in the U.S. than in Europe and Asia so they are taking the knowledge and acumen from the U.S. market and moving them over so they can be ready to take over the electronic trading game in Asia as they have here," he explains.
Nick McDonald, head of Asian equities at Instinet, agrees. "The equity markets in Asia are among the fastest growing in the world -- a development partially fueled by the rapid adoption of electronic trading technologies in the region," he says.
Instinet's Chan says he will be charged with rolling out additional electronic trading products and possibly new Asian markets, based on client needs. "Instinet will continue to introduce innovative trading technologies, such as our Newport and Instinet Trading Portal trading systems, and commission management programs, such as our BrokerShare program, to capitalize on these trends," he relates.
Shakhori says his primary responsibility as head of Instinet's DMA group in the region will be "to support our existing client base that trade non-Japanese Asian markets, and also push our new exchanges' memberships."
Instinet's McDonald says he welcomes electronic trading competition as the Asian markets heat up. "We think there is room for a wide range of platforms in Asia, and we respect what new competitors like Liquidnet and ITG bring to bear," he comments.
As for ITG's plans, the firm's Butler says he will be working to strengthen relationships with global fund managers that have trading desks in Hong Kong, Singapore and other key Asian markets, as well as serving the local fund managers and hedge funds in the region. "The global strategy for ITG is to roll out our full product suite around the world," he explains. Butler notes that ITG's TCA tools in particular are hot in Asia right now.
"ITG's business Down Under will also be a big focus," the firm's Corcoran adds. He notes that while Australia is in the Asian time zone, it functions more as an established Western-style market, which doesn't face the same infrastructure issues present in other Asian markets. "However, as more and more global investment comes into Australia and our fund managers in turn look externally for investment opportunities, we're ideally placed to help the Australian buy side reduce its trading costs through the use of new, intelligent tools," he says.
"What's key to the Asia Pacific markets is understanding the different intricacies or anomalies of each country, but then customizing core technology to unite these differences and help the buy side drive down trading costs," Corcoran continues. "It won't happen overnight, as there is a lot of work to be done across the region. But as we roll out our BLOCKalert dark pool, develop our algorithms and introduce our Triton EMS system for Asian clients over the coming year to 18 months, I have no doubt Asia Pacific will start to make a significant contribution to our global growth."
Editor's Note:
At Press Time INSTINET, which was purchased by Nomura Holdings in February, announced major changes to its top executive ranks. The company appointed two Nomura executives, Fumiki Kondo and Anthony Abenante, as new cochief executive officers.Kondo previously was managing director of Nomura Securities International and EVP of Nomura BlackRock Asset Management. Abenante previously served as managing director for U.S. equity and global program sales and trading at Nomura.
In addition, Instinet named Thomas Vogel CFO and announced that Kevin Farrell will serve as chief administrative officer. Further, Hiromasa Yamazaki, who served as head of global equity for the Nomura Group, has been appointed chairman of Instinet's board. Former chairman Ed Nicoll will stay on as a special adviser.
John Fay and Alex Goor, Instinet's former co-CEOs, are leaving the company to pursue other interests. An Instinet spokesman could not comment on the moves at press time.
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