Goldman Sachs is moving into electronic corporate bond trading once again. Despite quietly shelving its previous attempt, GSessions, in 2014 – something its creator said is reflective of big banks’ tendency to stifle innovation – Goldman has started allowing investors access to the $8.4trn corporate bond market for a second time.
GSA, as its now known, was rolled out to Bloomberg last month, drawing attention to the new platform that had so far remained largely out of sight for about a year. So far, it allows access only to ‘oddlets’, or trades worth less than $1m, but also offers $75-100m of bonds to trade every day, says the FT.
The corporate bond market has long been the last bastion of human traders, simply because the market has been considered too large, too full of documentation and too complex to leave to computers. Goldman is looking to change that – slowly.
“My guess is that they’re [Goldman] trying to perfect the algorithm,” said Matt Brill, a senior portfolio manager at Invesco.
If Goldman is making moves on the trading floor, UBS is looking to shake up research. By 2018, investment banks will no longer be able to ‘bundle’ research costs in with other trading fees – under MiFID II – so most firms have been shaking up their teams by hiring in a combination of senior, highly-rated analysts and juniors to support them.
UBS, however, wants to change the content of its research reports by employing data scientists, pricing experts and psychologists. Most firms making a commitment to research talk of the desire among investors for ‘meaty’ research, but Juan-Luis Perez, hired from Morgan Stanley in 2013 to lead UBS’s well-regarded research team, wants to change the format.
“If you are using the word risky all the time, you can never learn because the interpretation of risk is so broad that you can always take the victory lap,” he said on why UBS has been bringing in psychologists.
“It’s not just to avoid the word risky,” he added. “[It is] to try to break down the big questions, like ‘what is the future of the bank into testable propositions’ that can have an incontrovertible answer.”
It’s also going to solicit questions directly from clients, and then use a crack team of very niche specialists including data scientists and geospatial analysts to answer them.
Separately, a Blackstone associate called Max Salk is embroiled in a very public spat with Daily News journalist Shaun King. King claims that he received death threats from Salk in response to his column on refusing to standing for the Star Spangled Banner, reports Dealbreaker.
Salk has supposedly been removing all evidence of his existence on social media, but King has been taking screen-shots of his Linked profile, calling for a response from Blackstone on Twitter and publishing some fairly meek apologies from Salk claiming the whole thing had “nothing to do with my employment”. Blackstone has reportedly yet to respond.
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London bankers, move to Warsaw (Financial Times)
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