[ C O V E R
portunity is there to broaden traders’ horizons, make
sure that they are conversant in more than one asset
class, eliminate key man risk and ultimately have more
people feeding into the direction of those businesses,
which can only be a good thing for innovation.”
Another aspect for improvement is the increased
automation of LGIM’s trading processes, something
that Wicks believes will resonate with other large
asset managers, although he clarifies that he is talking
about the kind of automation that involves traders in
an oversight process, or, in other words, trading by
exception.
“Our efforts to date have been almost entirely fo-
cused on the equity business, which, given our execu-
tion arrangements, suits it very well,” Wicks says. “We
have taken a subset of our equity flow, approximately
4,000 orders year-to-date in a fully automated fashion,
where the portfolio manager raises the order and – if
they meet certain criteria – automatically routed to a
pre-selected algorithmic engine, then feed back into
our EMS and automatically booked.
“We’ve seen real success with that and of that flow
subset we initially started with we’ve seen no drop-
offs in performance in terms of transaction costs, if
anything there has been a slight reduction. I somewhat
attribute that to our speed-to-market being sufficient-
ly quicker; it may only be 10 or 20 seconds quicker, but
S T O R Y
|
E D
W I C K S ]
those seconds, as a percentage of
the window of execution, can be
quite great.”
Ongoing work
While there are plenty of oppor-
tunities for Wicks and LGIM to
explore, there are also challenges
to overcome in order to take the
firm’s trading operations to where
he wants it to be. As he says, the
“My personal view is that, to some
degree, asset classes are converging;
I know that’s not a popular theory,
but there is truth in that.”
quest for continual improvement
means that those objectives will
continue to develop, especially for
a firm dealing with the volumes
LGIM does.
“Trading trillions every year, a
busy day could see 20,000 equity
orders, 2,000 FX orders and 500
Issue 58 // TheTradeNews.com // 55