Funds searching for liquidity, anonymity, speed and arbitrage opportunities
Hedge funds will play a role in determining which of the new alternative trading systems will succeed and survive, as each ATS tries to find its market niche and steal market share from the Toronto Stock Exchange.
There are now nine ATSes in Canada, five of which are already operating, while four will be launched in the coming months. The latter group includes Project Alpha, the alternative marketplace backed by Canada’s biggest brokerage houses and the CPP Investment Board; and ATX, an alternative system being developed by TSX Group Inc.
Although dwarfed in size by the large pension and institutional funds, and representing a small portion of the overall trading business in Canada, hedge funds are seen to be key players on the “buy” side and will probably factor into the future of Canadian ATSes.
Industry insiders agree that hedge funds represent a growing segment of trading business. They also say that the new ATSes will give hedge fund managers more flexibility to develop and execute investment strategies.
“The alternative marketplace as a group will take off and go mainstream in Canada in 2008,” says Jackie Chung, president and founder of Toronto-based research firm Competitive Metrics Inc. “Hedge funds, like other buy-side institutions, are contributing to this development in their search for liquidity to get trades done.”
>>The complete article is available at Investment Executive
|
