E-Crossnet, the croissing network for institutional investors, today announced that it has just completed its best ever month. July saw the highest amount of matched trades on the crossing network since E-Crossnet was founded two years ago, as fund managers grappling with the bear market search for anonymity and liquidity where they can be found and look to cut costs.
July saw the highest monthly volume and value of matches between participants since the company launched two years ago. Investment firms matched a record 400 million of European equities in July 2002, saving in excess of 5 million on behalf of their clients through the removal of market impact and bid-offer spreads.
The record matches and cost savings come at a time when European equities are 30 per cent down year-on-year and indices are at their lowest levels since 1997.
Investors are increasingly using E-Crossnet as an additional source of liquidity with the total confidentiality of the system encouraging more orders than ever in difficult market conditions. Trading on the crossing network is direct and anonymous between participants and at the mid-price, thereby offering substantial savings on each and every matched trade. E-Crossnet says that, with average cost savings in excess of 85 percent, the scope for enhancements to net investment returns is substantial.
Nicola Horlick, Chief Executive of SG Asset Management, commented: “Our use of E-Crossnet continues to rise as we see an increased likelihood of completing low cost, low market impact deals in a secure environment. We expect it to remain a core trading tool.”
Peter Murray, Chief Executive of Railpen Investments, added: “Crossing – dealing directly between investors – is a trading technique that we encourage. The costs that are saved quickly become substantial and in an environment of poor market returns the incremental impact on performance is pronounced. We are always delighted when our investment returns can be enhanced in such an effective way and we would like to see much more crossing in the future.”
Betsy Anderson, Head of Dealing at Britannic Asset Management, said: “During July we enjoyed average spread savings of nearly 4 per cent on our trades through E-Crossnet. The crossing network is an invaluable tool for cost-effective trading as well as being a way to access institutional investment flows which are not otherwise being shown to the market. While we predominantly deal in small cap stocks, the liquidity and cost-savings benefits are across the board.”
Nigel Foster, Chief Executive of E-Crossnet, said: “This expansion in our business is extremely encouraging, particularly in light of the difficult market conditions. The increased order flows are having a powerful network effect and a record number of participants of E-Crossnet are enjoying success.
Crossing between investors is fast becoming a mainstream investment technique in Europe.”