Woodbine Associates’ new report, “Changing Approaches to Credit Trading” identifies opportunities available for dealers, execution venues and other service providers to profit by mitigating the buy-side liquidity shortfall that exists in the corporate bond markets.

This report explores sell-side and execution venue opportunities by examining how asset managers are changing their approach to credit trading in the investment grade and high yield credit markets.  It focuses on challenges; predilections and proclivities; and changes to trading strategy designed to source additional liquidity most effectively.


Key Findings of Woodbine Associates’ Report Include:
 

 

  • Sourcing liquidity and facilitating transactions among asset managers represents a tremendous new revenue-generation opportunity for dealers, execution venues and service providers in both the investment grade and high yield credit markets.

 

    • Asset manager liquidity needs far outstrip dealer inventories and capabilities
    • Asset managers are open to and seeking out alternative sources
  • Agency execution in both markets is poised for substantial growth and represents a substantial potential source of dealer revenue.
  • Market evolution is evidenced by data that illustrates:
    • 60 percent of asset managers plan to more actively “break-up” block trades into multiple smaller transactions
    • 60 percent of asset managers plan to increase use of electronic trading venues and protocols that access other buy-side firms
    • 36 percent of asset managers plan to increase direct access to non-dealer liquidity

This report is based on a rigorously crafted, invitation-only survey of 31 head or senior traders and portfolio managers at leading asset management firms.

This 37-page report has 22 figures and tables.

The report is available free of charge to Woodbine Associates Market Intelligence Service members.  It may also be purchased individually.

For more information please contact:

Sean Owens
Director of Fixed Income
Phone: 203-274-8970 x 204
Email: sowens@woodbineassociates.com

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