Liquidnet

Liquidnet is a global institutional dark pool trading network that connects asset managers with liquidity. Liquidnet trades in 41 equity markets for asset management firms who collectively manage US$12.5 trillion.[1]

Liquidnet is headquartered in New York City and has offices in Boston, San Francisco, London, Hong Kong, Singapore, Sydney, Tokyo, and Toronto.[2]

History

Liquidnet was founded in April 2001 by Seth Merrin as a wholesale electronic marketplace where institutional investors could trade large blocks of stocks.[3]

Merrin estimated that the network needed at least 100 buy side firms live on Day One to create a critical mass. This number was revised to 75, but the company ultimately launched with only 38 institutions.[3]

Merrin describes his company as “creating marketplaces that enable institutions to trade in size with the efficiency that they sorely need.”[3] In the U.S., Liquidnet’s average execution size of 50,000 shares is 200 times the size of the 250-share average traded in all lit and dark venues. Liquidnet’s average execution in international equities is reportedly 100 times larger than the average.[3]

Liquidnet has an Equity Capital Markets and Issuer Services group which leverages its community of institutional investors to determine institutional demand for a stock.[4]

In October 2011 Liquidnet launched a private shares market.[5] As part of Liquidnet’s equity capital markets division, the Private Shares group works with institutional investors and companies looking to trade private shares.[6]

Partnerships

SIX Swiss Exchange and Liquidnet launched a platform for non-displayed equity block trading in July 2011.[7] The platform allows SIX Swiss Exchange members and Liquidnet’s buy side members to execute large block trades.[8]

In January 2010, Liquidnet announced a strategic investment in OTR Global LLC, a primary research and brokerage firm.[9]

Patents

In December 2011 the Patent and Trademark Office awarded Liquidnet two United States patents relating to its global trading network. Liquidnet currently holds five US patents.[10]

Key people

Founder and CEO, Seth Merrin

Chief Financial Officer, William Maw

References

  1. ↑ Liquidnet Continues to Dominate Block Trading Globally During Third Quarter | Reuters
  2. ↑ Liquidnet opens fourth office in Singapore | TopNews Singapore
  3. 1 2 3 4 Seth Merrin: Imagining Wholesale Change - Advanced Trading
  4. ↑ Liquidnet attracts corporate share buy backs - FT.com
  5. ↑ Dark pool launches private share market - FT.com
  6. ↑ Liquidnet Hires Lou Kerner, Enters Secondary Market for Private Shares - NYTimes.com
  7. ↑ SIX exchange, Liquidnet report progress - FT.com
  8. ↑ Liquidnet And SIX Swiss Exchange Launch Platform For Non-Displayed Block Trading - Wall Street & Technology
  9. ↑ Liquidnet Announces Strategic Investment in OTR Global
  10. ↑ Liquidnet awarded two trading patents
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