Bond Managers: Please Hang Up and Try Your Order Again

For anyone worried that the fixed-income market is broken, co-founderBill Gross的9月从太平洋投资管理有限公司出发没有安慰。据芝加哥的研究公司晨星称，按月份的债券巨头Pimco遭受了255亿美元的净流出。这些资产倾倒在越来越卑微的市场中，其中银行必须持有增强资本的规则促使经纪人经纪人削减债券库存。

为了使事项更糟糕，企业信贷的投资者仍然是最大，最重要的交易的电子贸易。他们中的许多人通过拿起电话并在主要基础上下订单来抓住过去，这需要经销商立即稀缺。历史上低利率和债券基金的持续胃口有助于让管理人员拒绝。经销商善于向买家分发新问题，但在流动进入另一个方向时尚未进行测试。

“For the time being, benign conditions hide the flaw, and market participants fail to institute changes to address the problem,” Anthony Perrotta, New York–based head of fixed income with research firm TABB Group, wrote in an October report on illiquidity in the corporate bond market. “This is especially true of the investment management community, which is reluctant to initiate the changes that will break its dependence on the principal-based model.”

随着经销商休息，一些创新的电子解决方案出现了。去年，由J.P. Morgan＆Co.的Labmorgan公司出现的公司债券的自动化平台，2000年孵化器，形成了战略伙伴关系黑石。The world’s largest money manager connected its Aladdin Trading Network, an investment system used by BlackRock and outside clients for order flow, to New York–based MarketAxess’s e-trading platform.

This Open Trading initiative turns the traditional paradigm on its head by allowing dealers and investors to share their orders as broadly as they like. If Prudential Financial, for instance, wants to buy some bonds that Loomis, Sayles & Co. is trying to sell, the two firms can connect and have the trade cleared by any dealer on the platform.

“It’s an enormous behavioral change, for investors in particular,” says Richard McVey, who has been chairman and CEO of MarketAxess since its inception. “It will take time, but the adoption rates are encouraging.”

During the second quarter of 2014, the number of clients using Open Trading protocols grew roughly 49 percent, from 175 firms to 260. The new model is a product of the times. “In the days when dealers had plenty of capital and could hold huge inventories of bonds just waiting around for buyers and sellers, MarketAxess’s Open Trading initiative likely would not have gotten off the ground,” says Michael Chuang, CEO of iTB Holdings, a New York–based provider of software that connects professional traders to the electronic fixed-income venues of their choice.

What dealers get from Open Trading is the ability to do trades on a lower-fee, riskless, agency basis (clearing the trade when two managers find each other independently). They can also do principal trades by putting up capital.

McVey强调改变的环境正在推动每个人找到解决方案。“公司债券的流动性风险转移到投资经理，他们持有绝大多数债务，”他说。“由于监管变化，经销商不再有资产负债表作为市场环境转移时作为缓冲区。”

自金融危机以来，电子交易大幅发展。不计数经销商对经销商交易，市场上有大约20％的二级客户市场股票份额大约20％。根据康涅狄格州斯坦福德的研究公司Greenwich Associates，与传统经销商J.P.P.P.P.P.P.P.P.P.P.P.P.P.P.P.P.P.P.P.P.P.Pase股。

E-trading has also created new sources of liquidity. MarketAxess has added 50 dealers to its platform since the crisis, largely because investors pushed the platform to add new trading sources. Those dealers, many of which spun off from the big firms, now account for 30 percent of MarketAxess’s volume.

Other electronic trading outfits are sniffing opportunity too. Investment Technology Group, a New York–based stock trading and technology firm, recently announced that it’s launching a dark pool, a private alternative to an exchange, for fixed income by the end of the year. New York–based Liquidnet Holdings finalized its purchase of Vega-Chi, a London-based electronic platform founded by a former Goldman Sachs Group trader, in August and plans to offer a credit trading network in addition to its private stock market.

The number of investors trading at least some of their bonds electronically has jumped 70 percent since 2009, notes Kevin McPartland, head of market structure and technology advisory at Greenwich Associates. In the past five years the proportion using e-trading has climbed from 47 percent to 80 percent. About one third of smaller institutional bond trades — so-called odd lots, between $100,000 and $1 million in size — take place electronically, according to McPartland.

但制度块交易，100万美元至2500万美元之间的交易，不太经常使用机器完成。Mcvey表示，价值500万美元，更令人难以捉摸的市场，但他预计开放的交易努力将有助于改变这一点。

Investors are reluctant to display their corporate-bond block orders broadly, fearing that information will leak to the market and foil their efforts to get good prices. With Open Trading, however, dealers and investors can display indications of interest to find potential trade matches. Once a match is identified, the two can negotiate price and size privately, limiting information leaks.

To tap new electronic trading sources, money managers need to make faster decisions and be much more active in the markets than they have in the past. There are signs of change. For example, managers are hiring sell-side traders used to responding to opportunities all day. They’re also giving traders the flexibility and authority to buy or sell bonds that meet a manager’s requirements but might not be an exact match.

尽管电子交易的成功和市场开放交易等努力的创新思考，但仍然是早期 - 贸易自动化一旦投资者开始在市场更正中销售销售，就不会削弱了非水分固定收入市场的打击。

“你拥有所有这些新生的努力让人们更加电子地交易，”莱德兰德曼说，其中四名团队之一，其中一个监督美国固定收入为140亿美元的资产经理TCW集团。“但电子交易不会挽救你。”他的同伴Bryan Whalen同意，说：“有这种虚假希望，资产经理A将提供有流动性的资产经理B，反之亦然。那不会发生。“

但如果华尔街没有缓冲ets when interest rates inevitably rise, firms like Los Angeles–based TCW are happy to step in. Because TCW’s managers are value investors, Landmann stresses, they will benefit from illiquid and volatile markets by purchasing mispriced securities. As bond prices have risen, the firm has been trading into more-liquid agency securities and Treasuries, so it has enough cash on hand to buy into a market correction.

Today’s illiquid fixed-income markets are part of a big behavioral shift that has been afoot since the 1980s, Landmann notes: “When Salomon Brothers was a private firm, it stepped in to buy bonds when markets went mad, regardless of what the activity did to its earnings in the short term.”

But Salomon became more risk-averse once it went public and became subject to scrutiny of its quarterly earnings. After hedge fund firm Long-Term Capital Management needed a bailout in 1998, Wall Street further retreated from risk, adopting value-at-risk models, which essentially advise selling securities when volatility is high and buying when it’s low, the opposite of value management.

Landmann表示，2013年的Volcker规则，禁止银行从专有交易，是一个“卑鄙的笑话”。在Volcker下，银行无法在艰难时期踩到购买证券的传统作用。“这就像在我14岁的泥土上拧紧减震器并说，”在那里试试撞击，“兰德曼解释道。“你不知道你是否会越过把手，当你碰到那个颠簸时。”

增加了他的同事鲸鱼：“我们推动了太远的钟摆。我们必须在它摇摆反向之后看到反响。“

Follow Julie Segal on Twitter at@julie_segal。

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