The liquidity crisis in March 2020, brought on by a combination of coronavirus, oil trade wars and the central bank responses, has left traders reporting one-sided markets in major securities. This puts buy-side desks under massive performance pressure. If assets cannot be bought or sold, the investment strategies set out by portfolio managers cannot be put into effect.
Trading desks that have invested in technology and are structured on trading by liquidity profile instead of asset class, can give asset managers the efficiency needed to trade high volumes at high speed wherever possible, says Gianluca Minieri, deputy global head of trading at Amundi Asset Management (€1.4 trillion AUM).
He reflects on what this crisis can tell us about trading operations today, and the potential changes asset managers may need to make in order to come through it.