Liquidnet, the electronic marketplace for block trading announced its second quarter results today.
The quarter saw significant developments and a quickening of the pace in the company's efforts to build the global institutional marketplace. As of Q2 2006, Liquidnet counts nearly 60 percent of the top 100 U.S.-based asset managers as Liquidnet Members, and 70 percent of the top 20. The Liquidnet community's collective equity assets under management climbed an additional $1.5 trillion to $9.98 trillion at the end of Q2, firmly establishing Liquidnet as the buy-side industry's marketplace of choice.
"The public markets have enormous breadth in terms of the stocks they trade, but virtually no depth and are just not equipped to handle institutional orders," said Seth Merrin, CEO of Liquidnet. "Liquidnet provides our institutional Members the depth of liquidity their trades require. Our job is to continue to expand our breadth of coverage for our Members. Growing our Member base and adding more Streaming Liquidity Partners via our H2O model provide two ways of expanding coverage for our Members. Liquidnet is the one electronic venue to bring together both the breadth of the public market and the depth of the institutional market."
Liquidnet's Volumes Continue to Rise
Second quarter 2006 marked Liquidnet's 13th consecutive quarter of growth in average daily volume (U.S. equities). Average daily volume for the quarter was nearly 46.5 million shares, an increase of four percent over the first quarter 2006 and a 60 percent increase over the same quarter last year.
Mega-Block Executions Continue to Grow
Liquidnet remains the primary trading venue for block-sized orders by the buy-side community. Our Members' executions averaged more than 47,000 shares per trade, with an average trade value of nearly $1.5 million. Liquidnet Members also dominated the volume in the names they executed in the second quarter, with 69 percent of all trades representing the first or second largest print of the day.
Additionally, the Liquidnet community recorded its first five million-share block trade in Q2, a new Liquidnet record and one of the largest mega-block executions in the industry to date.
Global Expansion
This quarter, Liquidnet was approved by the Ontario Securities Commission to trade Canadian equities, leading the way for Liquidnet's Member firms worldwide to start trading Canadian equities beginning in the fourth quarter of 2006. In addition, Liquidnet launched two new European equity markets - Luxembourg and Portugal - allowing Members to trade in a total of 15 global markets. Offices in Hong Kong and Tokyo were opened recently with a physical presence expected in at least one more market in the Australia and Asia region before year's end.
Liquidnet Europe Information
Total principal traded rose during the first half of 2006, reaching 8.262 billion pounds Sterling by the close of the second quarter. At this level, Liquidnet Members have already traded more during the first half of 2006 than in all of 2005. There was a 10 percent decline in total principal traded during the second quarter 2006; however, total principal traded increased 153 percent from Q2 2005 to Q2 2006.