BlackRock and MarketAxess have formed an alliance to create a unified, open trading solution in the US credit markets.
The alliance between BlackRock’s Aladdin Trading Network (ATN) and electronic credit trading specialist MarketAxess is designed to help reduce liquidity fragmentation and improve pricing across credit markets, while expanding both firms’ open trading efforts.
MarketAxess will run electronic trading and broker dealer operations, which will be connected to BlackRock’s enterprise investment system, Aladdin, which hosts USD14trn in BlackRock and Aladdin client assets. BlackRock will provide buy side leadership, input on strategic direction, and innovations in trade execution capabilities for clients. The two firms will work together on product and business development.
The alliance evolves Aladdin Trading Network into a fixed income trading portal that consolidates fragmented liquidity for the benefit of Aladdin clients, significantly expanding access from within Aladdin to the broader marketplace. The partnership leverages the connectivity and distribution capabilities of MarketAxess to enhance access to liquidity and improve pricing for BlackRock asset management and Aladdin clients quickly and effectively. More than 1,000 asset managers, insurance companies, other investor firms and broker-dealers are active users of the MarketAxess platform.
“This partnership enables Aladdin clients to tap into a deeper liquidity pool without ever having to leave Aladdin, while maintaining their existing trade workflow,” says Ryan Stork, managing director and global head of BlackRock’s Aladdin business. “Aladdin Trading Network serves to improve liquidity and enhance the Aladdin value proposition, and this alliance is a critical step forward in evolving open trading solutions on behalf of our clients.”
MarketAxess has developed a suite of electronic trading solutions, helping its clients to source liquidity by allowing them to efficiently reach the extensive MarketAxess community of institutional credit market participants. The alliance with BlackRock combines order flow from the world’s largest asset manager and its community of Aladdin users with MarketAxess’ broad network of investors and dealers to create a centralised credit trading marketplace.
“Through this strategic alliance with BlackRock we are delivering on our commitment to provide an independent, comprehensive electronic trading platform to address liquidity challenges in the credit markets,” says Richard M McVey, chief executive officer of MarketAxess. “The work with BlackRock will comprise our full range of e-trading options including multi-dealer RFQ, Market Lists, Client Axes and electronic order matching. We will benefit from BlackRock’s influence and thought leadership in developing new solutions for credit trading, and from seamlessly connecting to their extensive Aladdin community. We think this alliance further validates the advantages of the MarketAxess platform as the logical venue for credit market liquidity to converge and help reduce fragmentation.”
BlackRock and MarketAxess have executed a letter of intent and commencement of operations is subject to finalisation of a definitive agreement, which the parties expect to complete within the next several weeks. Project planning for technology integration is already in process.