About technology

If you look at how the trading environment has changed over the last ten years, it’s exciting. Ten years ago most trades were done over the phone. Today, we’re talking about microseconds, HFT firms that employ military technology to maximise their trading speed; that’s how much the market has changed. Millions of trades happening every second. Once you accept that the trading environment has changed so dramatically, technology has to be part of your life. With the worsening liquidity situation in the market and the fragmentation due to the stricter regulation environment, technology has to play a major part in our investment strategy. Over the last three years, at Pioneer, we have made a significant investment in technology, and last year we completed the deployment of our global order management system, Aladdin, which is an global Order management System (OMS) with an integrated execution management system, with all the relevant connectivity.

Today, we are connected, via FIX, to all major electronic platforms; Tradeweb, Market Access, Bloomberg, TSOX, BondVision. With the volumes and sizes we trade, we need to leverage on as many sources of liquidity as possible and in this type of environment, only technology is capable of giving you that possibility. The fragmentation of liquidity that has been generated by legislation, regulation and the change of market structure, has now made it impossible for people sitting on a desk, to go and look at every single venue. You need to have your order management system, your connectivity to exchanges, your smart order routing, an optimiser that allows you analyse the quality of execution that you have in every single venue, and so on.

In 2015, we have also completed the implementation of the Global Trading Desk, which is one of the reasons we were given the ‘Best Multi-Asset Trading Desk of the Year’ award. It’s basically, a global integrated order book, on which all assets can be traded, leveraging local market expertise. So, if a portfolio manager in Europe wants to execute a US security, we can leverage on our Boston trading desk. Every order can be executed in the place where you have the best capability and in the local time zone, leveraging on the full market day. We feel that that will give us an edge vis-à-vis our competition, because it will allow us to enhance the quality of execution, reduce dramatically the cost of trading and minimise the market impact over all, eventually adding value to the investment process.

I believe the choice an investment firm makes about its trading technology strategy can significantly  impact alpha generation. Having the right technology  infrastructure in today’s market place is a must to become a best-in-class asset managers and generate investment performance, beause the right systems will allow fund managers to focus on what they are paid for, without the distraction of having to spend time in navigating through cumbersome booking processes or downstream manual tasks. In today’s highly pressurized trading environment, you cannot ask to traders to execute a large amount of orders with the right quality, market timing and speed if they have also have to worry about filling the gap of poorly integrated systems, which eventually will translate in trade errors, opportunity costs and compliance breaches. The technology infrastructure that a financial firm adopts can have resounding repercussions both for the firm and potentially for its clients.

As an investment organizations that consistently pursue new asset classes, new strategies and new jurisdictions, in Pioneer senior management is greatly aware of the importance of having the right IT infrastructure in place to support growth and scale.