[ C O V E R
S T O R Y
|
E D
W I C K S ]
operating model, which we have
now achieved.”
The next item on the agenda for
Wicks dovetailed with the first, in
that the size of the firm’s opera-
tions on a global scale required a
different approach to managing
risk. To do so, Wicks wanted to
bring more of LGIM’s data to
“I view the UK’s GDP as good
contextual metric and on an annual
basis we are trading multiples of
that, so it is a serious business
and it comes with a great deal of
responsibility.”
bear within its trading processes,
something the firm had done in
the past in a fragmented manner
with various groups of traders and
covering certain metrics.
In response, LGIM has this year
implemented a centralised trading
research department comprised of
quantitative analysts, allowing the
desk to aggregate its data in one
location, which Wicks describes as
a “real win” for the trading team,
as well as being complimentary
to its third-party transaction cost
analysis (TCA).
The final element for Wicks was
to optimise the use of electronic
trading on the LGIM desks. He
reiterates the need to be more
efficient with the resources the
firm has available to it, meaning he
only advocates increased electron-
ification where it makes sense to
do so. For example, approximately
80% of LGIM’s equities business in
EMEA is conducted via algorithms,
but that doesn’t mean Wicks will
implement a similar approach
for trading across all other asset
classes.
54 // TheTrade // Winter 2018
“Rates lends itself well to electronic trading and our
business mix supports that, so we have been successful
there,” he explains. “Then we recognise that in other
markets, such as credit, where we have a very active
book of business with a very high average trade size,
it perhaps doesn’t lend itself so well to electronic
trading. The fact that we are able to electronify other
markets frees up resources to look at that high-touch
business.”
Capturing opportunities
None of these changes are new for Wicks personally,
who highlights his work at previous roles with JP
Morgan and BlackRock as having instilled the vital
nature of operating globally, trading electronically and
incorporating data into the decision-making process.
However, this doesn’t mean there isn’t scope to drive
further change based on his views of how the markets
and the nature of trading are evolving.
“My personal view is that, to some degree, asset
classes are converging; I know that’s not a popular the-
ory, but there is truth in that,” he asserts, pointing to
the twin drivers of increased regulation and a growing
desire from end users for more transparency in how
markets operate. This, in turn, presents LGIM with
significant opportunities going forward, according to
Wicks, who states that the firm is large enough and
possesses the scale to influence how the market struc-
ture is going to develop.
Wicks details that he views the LGIM trading oper-
ation as two separate buckets of traders, with equities
and FX on one side, and fixed income on the other.
Wicks says he is keen to break down siloes among his
trading teams: “I don’t particularly like labelling some-
one with a specific, granular-type activity. I think there
is a place for that and we will always have asset and
multi-asset class specialist traders let me be very clear
on that point, but alongside that it’s very important to
embrace the multi-asset trading capability,” he says.
Following the implementation of a new EMS for
the firm’s FX activities, Wicks was able to co-locate
the FX and equities trading teams at LGIM, resulting
in more people having sight of a more diverse set of
instruments with the same post-trade analytics. It’s
another example of how the firm is adapting to chang-
es in the market structure and how that impacts on its
approach to trading different asset classes.
“The trading protocols are coming together, the mar-
ket structure of equity and FX is converging, which are
both high volume and macro products for us and we
have seen real success with that,” Wicks says. “The op-