MarketsMuse.com merges Fixed Income and FinTech with continuing coverage of the corporate bond market’s effort to evolutionize via electronification with a focus on yet the latest innovator initiative courtesy of Goldman Sachs alumni Amar Kuchinad and his start-up“Electronofie.” Our hats are off in salute to the catchy company name and extracts below are courtesy of recent profile in Fortune Magazine. Roger Daltry adds: “Dealers, Can You Hear Me?” Or, As Victor Hugo once wrote, “nothing is stronger than an idea whose time has come.”
Fortune Mag’s Shawn Tulley “takes it away” starting here:
It sure looks like the Golden Age for bonds. The $7.7 trillion U.S. corporate fixed income market is the largest source of liquidity on the planet for companies, and individual investors, pension funds, and endowments are flocking to bonds as never before.
So it’s hard to believe that anything this important could be so trapped in the past. At America’s biggest, most-tech savvy asset managers, traders speed-dial their favorite Wall Street salesman to place their biggest orders over their trademark headphones, just as in the Liar’s Poker era. The electronic platforms that transformed the equity markets decades ago mainly never arrived for the bond market. Relative to stocks, big-ticket fixed-income trading is stuck in the Stone Age.
Naturally, the beneficiaries are the investment banks who charge fat markups and, frequently, their hedge fund clients, who feast off of the constant leaks on who’s buying and selling big chunks of bonds, information that Wall Street firms use to cement their most lucrative relationships. Continue reading