Hugh Willis, co-founder of BlueBay Asset Management - the specialist fixed income credit manager with $62.5 billion of assets under management - and its chief executive from 2001 until the end of 2013, has just joined Algomi as a strategic adviser.
It’s an intriguing appointment for the fast-growing provider to banks of information-matching solutions for the optimization of fixed-income liquidity.
“Hugh joins us at a key time for the company, as we continue to expand and enhance our offering," says Michael Schmidt, chairman of Algomi. "His unrivalled experience in scaling firms quickly, and the vast knowledge of credit, alternatives and asset management that he brings, will prove invaluable.”
Stu Taylor, CEO, Algomi
In its May edition, Euromoney carries a profile of Algomi, which was founded in 2012 by Stu Taylor, Robert Howes and Usman Khan, who had previously worked together on the UBS PIN network for matching client orders in the bond market.
Algomi builds systems to capture the vast quantities of data, including buy-side queries that might not become full orders and which a bank might not execute, that is often lost on banks’ bond trading and sales floors.
Properly organized, this data might enable sales teams to do a much better job of building off-setting customer axes into fully formed orders.
Taylor tells Euromoney: “Our systems capture that information and create a virtual balance sheet, not of bonds the bank owns but of bonds it knows about where there may be potential to trade. The key is then to unlock liquidity in those bonds. And that is something that voice sales people are much better able to do than e-trading protocols.”
He adds that, in the effort to improve bond market liquidity as dealer balance sheets shrink, "we’re almost the anti e-trading alternative”.
Among the early backers of Algomi are some high-profile private-equity funds, including one prominent backer of Spotify making a rare excursion into business-to- business investing. It sees the potential for a big network effect to transform the bond markets.
Euromoney reports that Algomi is now beta testing a system that will link buy-side accounts into the internal networks of banks and so allow investors to post indications of interest and receive notifications if another customer contacts the dealer with an off-setting query.
Knowing the buy-side’s struggles to turn bond positions over, Willis says: “Algomi is creating innovative solutions to what I regard as an important issue currently faced by fixed-income markets: namely the need to square the increasing capital and regulatory pressures faced by banks on the one hand, with a continued need for fixed-income market liquidity on the other.”