Liquidnet, a global institutional trading network, and Abel Noser Solutions have launched the pilot of Portfolio Manager Profiling.
When incorporated into Liquidnet’s Virtual High Touch Next Gen algo suite, the predictive analytic model links historical trade and TCA data with the portfolio manager’s decisions to generate a distinct profile for each participating portfolio manager.
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After that these profiles are factored into determining a suggested algo trading strategy via Liquidnet’s Algo Ranking Model (ARM).
Currently, Portfolio Manager Profiling is being tested via Liquidnet’s virtual innovation hub, Liquidnet Labs.
Abel Noser Solutions president Peter Weiler said: “A portfolio manager’s tendencies have always influenced a trader’s execution strategy but being able to consistently replicate a profile pattern used to be a challenge.
“But by analysing a client’s TCA data, we can now discover any persistent patterns that are statistically significant. With Portfolio Manager Profiling, Liquidnet pulls that analysis into its Algo Ranking Model to rank suggested execution strategies that are aligned to that PM’s preferences.”
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By GlobalDataLiquidnet global head of equity strategy Rob Laible said: “Buy-side traders are increasingly turning to smart execution tools like Liquidnet’s Algo Ranking Model to help support their trading decisions. A PM’s tendencies are often nuanced, but could have a significant impact on the execution approach a trader takes. Being able to use technology to more accurately pinpoint those tendencies is a powerful addition to a trader’s toolkit.”
