Appital, which automates equities bookbuilding, is integrating with its second execution management system, FactSet’s Portware, to help the buy side find liquidity and automate their workflows.
Rob Watts, director, strategy and product management, trading solutions at FactSet told Markets Media that one of the data and analytics provider’s largest clients had been working with Appital. The client saw value in Appital’s bookbuilding technology and they approached FactSet together.
https://twitter.com/AppitalHQ/status/1511972965881106435
By bringing Appital’s insight directly into the multi-asset class Portware EMS, the buy side is shown opportunities to participate in liquidity that might otherwise be hard to access without moving the market.
Investors can discover new sources of liquidity by providing Appital with a specific list of stocks they would like to buy and the platform can also capture preferences or profiles, such as interest in mid-cap European equities. Appital uses that data when the deal originator comes onto the platform to target pockets of liquidity within the watchlists and profiles.
Rob Watts, FactSet
"The key proposition here is electronifying and automating a manual bookbuilding process, and providing a technology-driven process for the buy side to set their own deal parameters and maintain control,” added Watts. “Liquidity is constrained in some cases: Appital makes opportunities visible to the buy side.”
As a result, if the buy side can execute off-exchange via Appital they can potentially achieve better outcomes for clients with smaller market impact.
The push for scale is a trend in the market which Watts said can be seen in recent buy-side mergers and acquisitions and this has increased the pressure for trading desks to adopt more data-driven trade automation. Automation has therefore been a major driver for both acquiring EMS solutions and the further adoption of Portware.
"We think a lot about electronic and automated workflow, automated routing, and technology which helps improve efficiency for major desks, so this partnership is also an efficiency play,” said Watts.
In a bookbuilding a broker traditionally sits between buy-side participants and calls around the market to build up a book of demand from potentially hundreds of orders in order to price a transaction. Appital allows investors to handle that entire process through direct access to its platform.
Buy-side traders looking to execute large orders in excess of five days average daily volume, including in highly illiquid, small and mid-cap stocks, have real-time visibility, full transparency and maximum control over the bookbuilding and deal distribution process.
Mark Badyra, chief executive of Appital, told Markets Media that another trend over the past 10 to 15 years is that equity trade sizes have fallen in size.
Mark Badyra, Appital
“Appital exists in order to increase the trade size and facilitate the ability to access liquidity, so traders can do a lot over a shorter period of time,“ added Badyra.
Badyra continued that an advantage of integrating with Portware is access to larger global asset managers.
“A trader wants to have as much aggregation as possible, so as part of the development process we have engaged with Portware clients to get feedback on what we are building,” he said.
Appital is currently onboarding asset managers in preparation for launching this year and has established a working group that includes some of the world’s largest buy-side firms.
Badyra said: "We have other EMS platforms in the pipeline before launch. The technology that we have built for Portware uses APIs and FIX so it is easily scalable."
In September 2021 Appital announced an integration with FlexTRADER EMS giving buy-side firms the ability to execute on Turquoise, the London Stock Exchange Group’s pan-European multilateral trading facility with straight-through-processing to more than 20 settlement venues.
Watts said: “We support innovation in the market and new initiatives which make things easier and more efficient for the buy side. This is a good initiative to be involved in and we are looking forward to seeing Appital take off."
