Institutions like BlackRock and Goldman Sachs Group have come up short in their attempts to run electronic platforms for corporate-bond trading. MarketAxess Holdings earns increasing profits at it, but the vast majority of the potential liquidity is still up for grabs, and Seth Merrin, founder and CEO of 13-year-old, buy side–centric equities pool Liquidnet, is setting his sights on it. In March, New York–based Liquidnet Holdings announced its acquisition of Vega-Chi, which launched Europe’s first multilateral trading facility for convertible bonds in 2010, adding European and U.S. high yields in 2012. With that technology, Merrin envisions “building out the largest institutional-sized liquidity pool dedicated to corporate bonds.” Liquidnet’s 740 member firms, he notes, “own 85 percent of the corporate bonds in the U.S. and Europe. They will come together to create a marketplace for bonds.” A serial entrepreneur, Merrin, 54, founded Merrin Financial, which introduced buy-side order management systems in the 1980s, and co-founded application-integration-software company VIE Systems in the 1990s. He is enhancing Liquidnet in other ways, notably with liquidity and transparency controls that have “systematized our clients’ access and [data] preferences.” In June, however, the Securities and Exchange Commission cited Liquidnet for shoddy information practices and penalized the firm $2 million. In April, Bob Garrett, formerly head of equity trading and prime services technology at Wells Fargo Securities, assumed the newly created position of head of technology.
Chief Executive Officer
The 2014 Tech 50