Surrounded by colleagues and friends from across the industry, Royal took to the stage at Chelsea Piers to accept his award.

After almost 40 years in the industry, Royal is set to retire at the end of December, handing the reins to his successor Hugh Spencer.

Royal needs little introduction. Beginning his career in 1984 as an FX trading manager at Cargill, based in Chicago, his career spans four decades. 

After 10 years in his first role, Royal moved to SJO Asset Management where he spent two years as a senior global trader based in Geneva. He then headed to John W. Henry & Company where he spent four years in the same role based out of Florida. 

It was in 2001 that Royal first joined Janus Henderson. After a five year stint at the firm in a senior equity and foreign exchange trading role he left for a brief interlude at Artisan Partners where he spent just under two years as director of global equity trading and operations. He re-joined Janus Henderson in 2008 and, as they say, the rest is history. 

Royal has been global head of equity trading for Janus Henderson Investors since 2017 and despite his now-lofty title as global head he continues to trade both US securities and foreign exchange for the firm.

This ethos is something that he has instilled in his traders, including his now successor, Spencer.

Alongside his extensive history serving on the buy-side, Royal has remained committed to contributing to various industry associations throughout his career. He is currently a member of the National Organisation of Investment Professions and of the IEX Buy-Side Trading Advisory Committee. He has also previously spent periods of his career serving on the NYSE/ICE and NASDAQ Institutional Trader Advisory Committees, the FINRA Market Regulation Committee and the National and Denver Security Traders Association.

The TRADE would like to extend a hearty congratulations to Royal and wish him a happy retirement.

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Oliveira originally joined BNP Baribas as part of its corporate and institutional banking division in 2017 as deputy head of Hispanic, LATAM CIB. Since joining he has served in a number of roles across FX, commodities, local markets and global credit, rising through the ranks to his most recent role as global co-head of global macro and global credit in 2022. Prior to joining BNP Paribas, he served for almost a decade at Credit Suisse as its co-head of Brazil FID.

Luke Holmes, head of equity sales trading, US clients at Kepler Cheuvreux left the firm after five years, as revealed by The TRADE. Holmes joined Kepler in 2019 having previously served in equity sales trading roles at Sanford C. Bernstein and Goldman Sachs. His next role is unconfirmed.

Cameron Beale, head of sales trading, UK clients at Kepler Cheuvreux has also left the firm for pastures new. Prior to joining Kepler in 2019, Beale spent more than 25 years at JP Morgan, serving as equities sales trader and executive director.  

Janus Henderson Investors appointed Francesca Alesi as a junior equity trader, based in London. Alesi joined the asset manager from GSA Capital, where she spent the last two years. Most recently, Alesi served as an execution trader – a position she held for just over a year. Prior to that, she served as an analyst at the firm.

Liquidnet appointed Amanda Lee Volk as trade coverage/execution consultant for its New York desk. As part of the role, Volk will focus on providing primary account coverage for Liquidnet ATS members, which includes institutional, hedge, quant, multi-strategy and index funds. Volk brings 18 years’ experience to the role from Nomura, with particular expertise in the ATS block and algo trading space.

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According to an update on his social media, Mair has joined hedge fund and systematic trading platform Schonfeld as an equity trader dealing with long and short strategies.

He joins after spending the last 14 years with Janus Henderson, most recently as a senior equity trader for six and a half years.

Prior to his most recent role he spent six and a half years as a multi-asset trader. He originally joined the asset manager in 2010 as an RFP associate on the fixed income team. 

Mair was recognised as one of The TRADE’s Rising Stars of Trading and Execution at Leaders in Trading in 2016 alongside 39 of his peers across the buy-side.

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The succession plan is remarkably unique and pays tribute to Royal’s character as a man whose love for his current company has driven his desire to ensure that his departure does not rock the boat. A rare commodity in the industry.

Sitting down with The TRADE, Spencer explains this plan of succession has been in place for several years, attributing its success to the planning and preparation that has gone into implementing it.

Hugh Spencer

New heads of trading have stepped up to the plate in three different regions. Spencer will take over from Royal as global head based in the US, Glen Pattinson will take over in London – following the departure of Richard Worrell to the London Stock Exchange at the start of this year – and Ryan Chan will take over from Spencer in his current role as head of the Asia Pacific dealing desk.

“When you have situations where you have change like this, it [global approach] means you’ve got continuity. Everyone is ready to step up. This is all internally sourced succession. This creates that continuity which breeds the strong culture that we have and ensures that when we replace at the junior trader level, we can confidently bring new skillsets in. That’s where we add people with a scientific approach,” says Spencer.

“I don’t know if there’s many firms that would allow a transition process like this to occur and promote it and be proud of it. The person really driving it and being a huge part of that is the individual leaving. I’ve got so much respect for the company and so much respect for him. You’ve got a global head who’s retiring but still so excited about his job that he really wants to make sure that the global team is left in a better position than it was before he left. It’s selfless.”

Janus Henderson’s global offerings use the same systems and regularly communicate. With the succession plan in place, Royal has been grooming Spencer to take over to ensure a smooth transition when he steps back from his role at the end of 2024.

“I have an open dialogue with Dan,” explains Spencer. “This is again a very deliberate plan of succession, so having a line of sight into the global projects, meetings, and interactions already is hugely helpful for me to try to understand the direction of travel required ultimately to then transition into solely being global head of trading. One of his [Royal’s] many legacies is going to be how seamless the transition is.”

Future focus

Spencer is set to move over to the US in the Summer and work alongside Royal for six months to get his feet under the desk. He tells The TRADE that his core focus going forward is establishing the credibility that Royal is known for both in and outside the firm. However, hints towards a more systematic focus once the new structure is settled.

“Leveraging the credibility that Dan and the company have built up over decades with the street [will be the focus] firstly, then with internal relationships and with the trading team globally,” he says. “If there’s any aspiring leader or anyone that wants more responsibility, you have to understand as you take steps in your career that you have to be more confident with delegating responsibility along the way when required.”

“We’ve always been thought leaders when it came to customisation or bracketing of algos. The next logical step given that we’re not necessarily a quant house, is to really take a thoughtful, deliberate approach towards being systematic. And this involves approaching the majority of our order types, not just focusing on the easiest orders on the pad.”

Do what you love

Royal has been Spencer’s mentor throughout the majority of his trading career, and Spencer attributes his move over to the buy-side – originally joining Janus Henderson in 2011 as an equity trader in Singapore – to him.

“He is hugely supportive. Massively empowering in terms of a leadership style,” explains Spencer. “He understands that to have buy-in from the junior trader all the way up to your heads of desk, you have to empower and encourage individuals. You have to know an individual’s strength and then realise that that’s what you should be utilising as opposed to just trying to tailor a desk to lean towards your own strengths.”

The pair share a love of trading. Royal is renowned for continuing to actively trade throughout his career, even in his role as global head of trading, and this is something that Spencer intends to replicate when he ascends to the throne.

Dan Royal

“How can you have credibility with your traders if you’re not trading the same things every day? How can you understand the issues that they’re having or the complexity of what they’re dealing with if you’re not dealing it with yourself? There’s no corner office approach at Janus Henderson. We’re active in the investment process. Why would you give up something you love?” he implores.

“There’s something to be said for coming in trading stocks and talking about these stocks with my fellow team members. That’s irreplaceable. There’s a quote that really resonates with me. ‘You have to hear the sound of the bullets whizzing by to really understand what your teammates are going through’ (former Duke Energy CEO). You have to understand the stress, the strain, the smells, the sounds, everything that’s going on a trading desk if you’re going to manage it efficiently.”

Spencer has some experience of trading the US but has spent the extent of his career so far in Asia across Japan, Hong Kong and Singapore. He confirms that one of his focuses for the initial part of his new role in the US will be getting his feet under the trading desk and expanding his knowledge on how to trade the region.

“From a trading perspective, I have some experience trading the US market, but that’s something that will just take time,” he says. “That’s just spending time on the desk trading every day, chatting with the traders, working with the street there.”

Board boys and pressure cookers

Spencer began his financial career at Bloomberg as an IT support engineer and later as a network engineer. It was visiting offices to fit panels and terminals that he realised he wanted to flip the coin and join the industry in a front-office role.

“I was fixated with the other side of the panel,” he explains. “I was fixing all these Bloomberg terminals and got to a point where I wanted to be the one making the decisions on the other side of those screens. Three of my uncles were stockbrokers in Canada, so it’s a family affiliation with markets.”

During a rugby game in Japan, he scored his first front-office role broking interest rate swaps – a role he says is not for the faint hearted but that has shaped his career to date.

“Starting in money broking… I wouldn’t advise it for everyone. It’s extraordinarily fast-paced and high pressure. You have to learn to calculate spreads and prices on your feet. I started in the pressure cooker which involved a room full of individuals yelling and screaming and shouting numbers and closing deals,” he explains.

“It’s proper board boy material. You’re up there writing numbers down, getting coffees, moving cars, booking restaurants. All of the stuff which that doesn’t happen to juniors anymore, for very good reason. That system generates a lot of turnover in the junior positions because no one wants to do it for too long.”

He later gravitated towards equities. As a self-confessed lover of writing and research, the validation around investment decisions and the intellectual discussion surrounding execution in the asset class attracted his attention.

“Each step [in my career] has brought me closer to understanding the thesis behind why people are investing,” he adds. “As I got my head in the game I really wanted to understand why someone wants to own this. That’s why each stage of my career has gravitated closer to that investment decision as a result.”

EQ vs IQ

Australian born and bred Spencer has spent his entire financial career to date in Asia – some of the most profoundly complex and fragmented markets globally. Operating as an international sales trader at UBS in Japan for almost two years, he moved to Newedge, part of Société Générale since 2014, where he spent two years as a senior sales trader in Hong Kong.

He migrated to the buy-side with his move to Janus Henderson in 2011 when he joined as an equity trader. He later became the regional head of trading in 2014 and took up his most recent role as head of dealing Asia in 2017. His desk focuses on equities, alongside some convertible bonds, FX, systematic futures and over the counter (OTC) derivatives.

For Spencer, it is the market structure nuance that has kept him in Asia for as long as it has.

“Because you’re doing regional, any news outside of Asia typically affects a country within Asia from a global economic perspective so there’s always something going on,” he says. “You’re going to learn something new every single day simply because you’re covering such a breadth of different countries. That is what keeps people engaged and makes people want to stay out in Asia and pulls people to work out in Asia.”

Traders core skills are split between emotional intelligence (EQ) and intelligence quotient (IQ), he explains. They must want to and be passionate about researching stocks and understanding market structure minutia while simultaneously fostering relationships both inside and outside of their organisations. When asked how the firm mitigates the complexity of markets, he stresses the importance of dialogue with exchanges, regulators and other buy-side firms.

“You’ve got to be able to understand and love market microstructure. You’ve got to understand the impact of regulation. You need to enjoy delving into minutia,” he says.

“There’s always going to be times when you need to lean on someone because you don’t understand a certain regulation and why you can or cannot trade this market. If you’ve got a strong relationship with those individuals who are microstructure or reg experts, do you really think they’re not going to stay back five minutes to help you out?”

“For a younger trader coming in, having a data science background is key. For traders who are more established, you can’t just roll your eyes when the topic of data comes up. You have to be willing to get out of your comfort zone. You have to put your hand up and ask questions to the people on the desk who know more than you.”

Central to the EQ side of trading is ironically taking emotion out of the equation, says Spencer. Emotions must be controlled in order to achieve the success. Emotions in the form of strong relationships generate better outcomes, but emotions relating to trading decisions create uncertainty, exhaustion and risk.

“At first, you can’t help it if you’ve got pride in your work, which often brings with it sensitivity. Over time, you learn that there are elements you can’t control. I can’t control the broader market as much as I wish I could. I can’t control what other market participants are going to do in a stock that I’m trading on any given day. Over time, the daily emotional roller coaster gets milder, and you start to develop a systematic process within your brain of how to deal with all these variables,” he says.

“I always tell junior traders, it doesn’t matter if you get a $100 million order or $100 order, you need to have the same emotional process with it. You can’t have a differing process because something has a greater magnitude of value. Once you get to the point where you remove emotion you start making much better trading decisions.”

“I try to make that entry and exit as efficient as possible and protect as much alpha as I can. I try to advise when it does and it doesn’t make sense from a trading perspective to do something, but ultimately that investment decision has greater ramifications than the trading decision.”

Spencer is now preparing for his family’s move over to the US. The next six months will prepare him for his new role as global head of trading – no mean feat at a firm with 24 offices globally and just over $352 billion in assets under management. Royal’s succession plan has pioneered a new of stepping away from the helm and the street should take notice. Long live the new king.

The post A Royal succession appeared first on The TRADE.

Jennifer Pyrka Turner moved to Instinet to take up the reins as head of Americas execution sales, according to an announcement on social media.  The move followed a 19-year stint at Credit Suisse, most recently as managing director, head of AES sales Americas at Credit Suisse. In this new role, Pyrka Turner is based in New York and continues to operate across the Americas region. 

Dan Childs departed from his role as managing director, head of European prime services sales, EMEA to join Balyasny Asset Management, taking on the role of head, cash and liquidity management at the hedge fund. Childs previously spent almost three years with Jefferies after co-founding treasury technology start-up Kayenta in 2018. Prior to this, Childs spent the bulk of his career at Citadel, his final role as international COO after previously heading up treasury and operations. He began his career as a software developer before joining RBC and then Societe Generale.

Cboe Global Markets appointed leading industry figure Natan Tiefenbrun president of North American and European equities as part of the leadership changes announced last month, The TRADE revealed. The new role expands on his previous position as president of Cboe Europe, now also overseeing North American cash equities. This took effect as part of broader leadership changes announced by Cboe in October, which included Adam Inzirillo, previous head of North American equities being appointed the new global head of data and access solutions. Additionally, New York-based Oliver Sung was named head of North American equities in his stead, reporting into Tiefenbrun.

Janus Henderson promoted from within for its new head of equity trading for EMEA with Glen Pattison to take up the role in December after five years at Janus Henderson, having joined in 2018 as a senior trader. Prior to that he spent 11 years at Instinet. Pattison replaces departing Richard Worrell who is set to join the London Stock Exchange Group as its new head of secondary markets sales and business development, as revealed by The TRADE in October. 

FlexTrade Systems appointed Michael Kovach Americas head of fixed income sales in a move set to further drive the growth and adoption of FlexTrade’s fixed income EMS, FlexFI. In his new role, Kovach is set to be based out of New York and leverage his experience in electronic trading solutions. Prior to this appointment Kovach was lead relationship manager at BlackRock Aladdin, and before that spent four and a half years with Liquidnet, most recently as head of fixed income sales US.

Credit Suisse’s global head of FX, John Estrada, is set to leave the bank after 12 years, according to an announcement on social media. Estrada was promoted to co-head of FX last July, before becoming the sole head. Prior to that, he held various senior positions including global head of e-macro and global head of eFX trading. Estrada has previously worked at BNP Paribas and Sun Trading as eFX trader and financial engineer, respectively, and before that worked as a trader for Lehman Brothers. So far Estrada’s next step is unconfirmed.

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Glen Pattison will take up the role in December after five years at Janus Henderson, having joined in 2018 as a senior trader. Prior to that he spent 11 years at Instinet.

“We have an exceptional trading team here at Janus Henderson with plenty of talent to draw from. Glen’s appointment to EMEA head of equity trading is testament to his outstanding capabilities as a trader and illustrates the remarkable talent we have at our firm,” said Dan Royal, global head of equity trading at Janus Henderson, to whom Pattison will report.

“As a firm we are dedicated to developing our people and providing opportunities for career progression. I am confident that Glen’s extensive experience coupled with the significant professional breadth of the EMEA trading team will ensure a seamless transition and ensure that we continue to deliver for our clients.”

Read more – Janus Henderson’s Richard Worrell departs for LSEG role to kickstart new stage of growth

Pattison replaces departing Richard Worrell who is set to join the London Stock Exchange Group as its new head of secondary markets sales and business development, as revealed by The TRADE in October.

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Millennium has appointed Ryan Cain in an equites-focused role. According to an update on his social media, Cain joined Millennium from Segantii Capital Management, where he served as a trader for nearly six years. Prior to joining Segantii, Cain spent nearly four years as a trader at Apollo Global Management. Elsewhere in his career, Cain held an equity derivatives sales and trading position at Barclays Capital.

UK-based investment bank Peel Hunt promoted from within for its new deputy head of execution services. James Webb was selected for the role after serving for the last eight years at Peel Hunt, most recently as its head of systematic trading. Peel Hunt confirmed Webb’s responsibilities as systematic head will be encompassed in his new role. Originally joining the investment bank in 2016, Webb also spent five years as its head of FTSE350 market making. Previously in his career, Webb spent six years at KCG Holdings as its head of European ETG trading and three years at ING as a trader.  

Cboe Global Markets has appointed Catherine Clay as global head of derivatives as part of new senior leadership changes made by the firm to support growth strategies. Clay previously served as global head of data and access solutions and digital and will now oversee Cboe’s global derivatives business. Elsewhere, Adam Inzirillo, who previously served as head of North American equities, will now operate as global head of data and access solutions. As part of the role, Inzirillo will oversee Cboe’s market data and access services, global indices, risk and market analytics and execution solutions services. Oliver Sung – previously head of North American execution consulting at Cboe – will replace Inzillo as interim head of North American equities.

Equities expert Tommy Doyle joined Institutional crypto trading platform FalconX in an EMEA sales role, following a one and a half year stint at Coinbase. The sell-side equities specialist joined Coinbase’s institutional team last July, focused on leading the business’ efforts in hedge fund sales for EMEA. Prior to this, Doyle spent almost three years at Goldman Sachs, working in the equities space as a managing director. His experience also includes tenures at Citi and Bank of America Merrill Lynch, both in equities and prime brokerage-focused roles.

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He will join the exchange group as head of secondary markets sales and business development in January 2024, sources have confirmed.

LSEG and Janus Henderson could not be reached for comment.

The change marks a move away from the buy-side for Worrell who has an extensive equity trading career. He began his most recent spell at Janus Henderson in 2017 after a six-and-a-half-year tenure at Redburn as an equity sales trader.

Previously in his career, he also spent almost a decade at the asset manager in an equity trading role until 2006 and later spent nearly four years at SEB.

In his new role, he will be responsible for boosting the  exchange’s rankings and driving its next stage of growth after a series of senior leadership changes from within its capital markets business.

LSEG has reshuffled its capital markets top brass significantly in recent years in a bid to simplify its leadership across its expanding asset class remit. As part of the changes, the group said goodbye to some of its well-known  industry figures former chief executive officer of Turquoise, Robert Barnes, and former head of sales and platform distribution for securities trading, Scott Bradley, in November last year.

The exchange appointed internal candidate Lida Eslami to replace Bradley in an expanded role as head of equities and exchange trade products (ETPs) sales and relationship management in January. However, Eslami later left the exchange in May to join rival venue Cboe.

In his new role, Worrell will be responsible for sales and business development in its secondary markets business, taking up the responsibilities of Eslami and reporting to Sally Francis-Cole, The TRADE understands.

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Starting with Janus Capital back in 2001, Royal is one of the longstanding stalwarts of the equities space – and while he might relish his base in the beautiful wilds of Colorado, he is nothing if not connected to the movements of global markets. Heading up a global group of buy-side equity heads of desk that meet regularly to evaluate key themes of the market, he’s got his finger on the pulse now… but it took him a while to find his true equities calling. 

A long and winding road 

“I’ve been in the industry a really long time,” he says. “I took a role at Cargill Investor Services in Chicago on 25 June 1984 – and I remember walking onto the trading floor and just being totally overwhelmed.”  

He started out as a runner “which is sort of the lowest form of life on the trading floor, where you’re literally taking an order from a phone clerk and giving it to a broker in the pit and getting yelled at every step of the way. And that was my first taste of the business, and I loved it”. 

After 10 years with Cargill in the futures pits, ranging from S&P to FX, he left in 1994 and ended up moving away from the trading environment and onto a desk position. “I worked for a hedge fund in Chicago, then transferred to a bigger one in Florida, and that led me to Janus Capital [as was] in 2001.”  

Originally joining Janus as a turnkey foreign exchange trader, the role quickly evolved into a senior equity trader and was then actively involved in both asset classes for the firm, loving every minute of it.   

Royal took a brief hiatus from Janus in 2006 to move to Artisan Partners as director of trading and operations, yet returned to Janus in 2008 to head up the equities desk.  Then when Janus Capital merged with Henderson Group in 2017, he retained the role of global head of equities within the merged entity. Based in Denver, he now heads up a global team of 16 traders, of which five sit with him, six in London and four are based in Singapore.  

“It’s been great. It’s been amazing. I’ve loved the journey, and I love where I am now.”  

What was the pivot like from FX to equities?  

“I came from the FX and commodities world, transacting in a wide range of liquid products. While transitioning into the equity space, the noticeable change was the liquidity within any individual stock could be significantly challenged. Your order strategy, the way you approach liquidity, the way you approach a fragmented array of brokers and exchanges and venues – all of that is very different in the equities space. Order and liquidity management presented largest impact to the learning curve, ranging from the pace of orders to the range of toolsets. The scope and breadth of different channels within the equity space delivers a much more fragmented market in that respect – centralised from an exchange perspective, but with multiple venues, an endless number of brokers and a wide range of trading tools.  

But having said that, the thing about trading is that while asset classes might not all act the same, the characteristics and the psychology of markets are all very consistent. Whether FX or futures or commodities or equities, there’s a type of mentality and liquidity dynamics that runs throughout.”  

What proportion of your activity is equities now?  

“The firm has about $275 billion AUM. That number, largely equity, is exclusively handled by our team.  Additionally, we also trade equity derivatives, futures and a portion of the foreign exchange needs related to those products.” 

Do you trade as much as you’d like these days?  

“I attempt to operate as a bit of a player-coach. While I do sit on the desk day-to-day, often the management responsibilities of the role keep me from actively managing a blotter of trades.  Yet maintaining an active role in trading is invaluable in my role of managing the department. 

That said, we have a very seasoned team of traders. Nine members of the team have either been head of desk before or are currently running one, which makes my job significantly easier. Having that level of experience and seniority in terms of understanding the markets, the tools and the process provides our investment teams with an incredibly solid conduit into the marketplace. 

 As a trading team, we have been fortunate to experience a very low turnover rate. Though we’ve had a couple of senior team members depart to bigger roles, those situations provide the opportunity for junior talent to come forward. We have an amazing group of people at Janus Henderson in all different departments that intersect with trading, and while seats on our team don’t often open, we do attempt to tap internal talent whenever possible.”  

What’s the culture of your desk? What kind of outlook do you try and bring to the team? 

“The team approach, for me, is incredibly important.  Over the years, I’ve experienced many desks and corporate cultures.   I’ve been fortunate to see what works and what perhaps doesn’t work as well. Within Janus Henderson, our team operates in a very flat structure, focusing on a harmonised and inclusive effort.  Post-merger between Janus and Henderson, our focus was that of combining cultures as quickly as possible.  Given the similarity between our two legacy firms terms of desk construction and philosophy, we successfully focused on a ‘global first’ model in all we did. That philosophy extended across systems, coverage and workflows, giving us a seamless and harmonised coverage model for our investment teams.”  

How do you maintain communication across a global team?  

“This is crucial to the concept of harmonisation. We’re communicating constantly, daily, across all of our desks. The heads of desk circle up multiple times a week to discuss strategy and focus. We also run numerous department initiatives – anything from looking at how we can enhance our equity capital markets processes to how we proceed with automation – and we’ll assign team members from each region to be the champions of those projects. Then it’s their responsibility to liaise across all the global desks to move it forwards. It gives everybody ownership into the process, and it also gives everyone a working knowledge of what the needs of the desk are for that project.”

Where does your trading desk sit within the wider organisation?  

“I believe that the trading desk is not just about trading. We sit at the intersection of the portfolio managers, the analysts, compliance, legal, technology and product development. While serving the needs of equity trading, we find ourselves also being problem solvers for the broader efforts within the firm.  For example, if there is a new product being developed, often trading will need to get involved early in that conversation so that we can evaluate operational complexity and workflow. The ability to identify challenges and risk in existing and new initiatives is critical to a successful suite of products. So trading is more than just trading. We have to be a jack of all trades, as it were. 

A lot of it is about risk reduction. A bit like the frog and the water, where suddenly the water is boiling, and the frog didn’t notice – it’s our job to see when the water is getting hotter. We have to act quickly to establish functional tools that can support the level of risk we are embarking and ensure we are doing the right thing on behalf of the firm, of our investors, and of our shareholders.”  
How do you measure risk?  

“It is important that we evaluate risk with a continuous focus.  Everyone on the team has an ability and responsibility to identify workflows that present increased risk to the team and firm.  Often times, we will track those within a process we call nonstandard monitoring.  Through this we can help get a broader audience focused on potential mitigation efforts, if needed. It’s all about awareness – both on the desk, team-wide, and firm-wide.”  

How do you achieve optimum performance and best execution for your client? 

“For the greatest likelihood of a successful outcome when implementing the investment decision, we look at best execution as a process. It’s not a singular result. There’s not one number that’s going to define whether we achieve best execution. Often, non-practitioners might look at metrics like implementation shortfall, your comparison to interval, VWAP or other TCA metrics for achievement. But best execution is far more complex than that, and we incorporate all factors when evaluating our results. One of the most crucial elements is how we navigate our liquidity demands. Do we have the right tool set, do we have a platform that gives us all the right algos, the right high touch, the right crossing networks, the right data coming into it and the ability for the traders to navigate that? Our tool set must be broad and inclusive.  The platform and toolset need to be continually optimised. Markets evolve, liquidity demands evolve, there are numerous different components that are continually changing. You can’t just leave an algo running in perpetuity without attention and enhancement, as it becomes stagnant. This requires ongoing sensible conversations with product providers about how you can continually make things work better.  

We embark on this through the structure of our platform. At the beginning of our own innovation journey in around 2009 we took all of our algos – probably around 240 – and realised it was very difficult to perform A/B comparisons. With that as the goal, we wiped the slate clean and we created a bracket system, where each bracket is the equivalent of a toolbox. We now have nine brackets where each has a specific set characteristics. You could view each bracket as a tool in the toolbox, where the complete toolset gives each trader an ability to effectively navigate our markets and manage any situation from a liquidity perspective.  

From there we went to all our providers and said: here’s a description of our brackets, now build a custom product that fits the characteristics of each. With that in hand, our traders can utilise both qualitative and quantitative measurements to identify what works best in terms of achieving liquidity and minimising impact, through a framework that allows this constant A/B comparison. We have quarterly updates and reviews with our algo providers where we review our algo suite, evaluate metrics and implement enhancements where needed.”    

Why is peer knowledge share so important?

“Trading desks are at the forefront of a firm’s footprint to the street. We maintain the commission wallet, we maintain the relationships with our core broker partners, and we serve to enhance relationships between firms. It’s important to approach that in a positive manner – you don’t have to be everyone’s friend, but we do want to make sure that we have open and honest dialogue.  

One of the efforts I have been fortunate to be a part of is a group called the Buy-side Equity Trader Roundtable – a global grassroots group of head and senior traders that we started in 2009. We’re now up to 30 members and while we don’t act as an industry advocate, it’s enormously helpful in terms of sharing best practices, sharing thoughts, and sharing ideas. We keep our conversations contained within the group, it’s entirely confidential, but I think it has made our industry stronger and better. We’re careful about who we bring into it, but it’s immensely valuable to be able to bounce ideas off each other without someone else trying to solve the problem for you.”  

What is the biggest change that you’ve seen in the last 20 years? 

“Technology is always going be the forefront of largely anything we do. We’re always trying to grow and evolve, where technology is the single best way to become more efficient. Order flow and complexity continues to grow, efforts toward automation and workflow efficiencies continue to make our team more effective. Our focus continually looks to our OMS, EMS and TCA providers to partner with us on leveraging greater enhancements and efficiencies. Those efforts move the trading workflow from pushing buttons to greater value add in the investment decision and implementation.    

Currently, we’ve just wrapped up phase one of our automation process, so we are now able to define which orders are suitable for automation and which aren’t, and make sure our systems sweep them to the right place. We’re coming up to phase two, which will be to move up the food chain in terms of using variable logic, contingent routing logic within an order using multiple channels. It’s about having the hammer, the wrench and the screwdriver, and figure out what sequence we need to use them in to build the chair.”  

What would you like to see change in your market? 

“The market is incredibly efficient and it’s incredibly successful. The industry can be both resilient and fragile at the same time.  There is incredible complexity in the equity trading environment.  The industry has experienced significant technology glitches over the year that can be incredibly costly.  As we embark on regulatory changes both here and abroad, we cannot underestimate the downstream impact that some of these proposals may have on the ecosystem.  I can certain appreciate the efforts by the regulators to create a more level playing field, we just need an appreciation for the strain those may impose on the industry framework.”  

What’s your priority for 2023? 

“I’m always nervous about risk. That’s why we’re constantly evaluating and seeking to innovate. My priority is to make my traders more efficient, more integrated into the investment process, and better able to contribute to the global dialogue. That’s an ongoing effort. We’re constantly evolving. So my message is to be aware of innovation, embrace change, and continually seek to move forwards.” 

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The FCA has accused five people of manipulating a derivative product (contracts for difference) in order to bet against the value of numerous companies, generating an estimated profit of around £1.5 million.  

Former Janus Henderson analyst Redinal Korfuzi allegedly used confidential inside information to enable “timely and profitable trading” in 49 companies through accounts held by co-conspirators Oerta Korfuzi, Iva Spahie, Rogeria de Aquino and Dema Almeziad.  

The fraud was committed using a derivatives product called contracts for difference in relation to each of these companies, betting that the value of shares would go down after the announcements.   

Read More – Record fines in 2022 as regulators crack down

The five individuals were also charged with money laundering offenses relating to over 170 cash deposits totalling around £200,000. They were arrested in March 2021, after a multi-site operation by the FCA and police, and will appear in court on 22 February. All are expected to plead Not Guilty. 

The FCA notes that Janus Henderson cooperated fully with the investigation.  

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