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Flow news; Special delivery
David Fuller knows all about information overload.
David Fuller knows all about information overload. The veteran trader quit Lehman Brothers in March 2001, after four years on its London futures desk, in part to get away from being constantly bombarded with news and video feeds, streaming quotes and bothersome e-mails.
The unplugged Fuller spent nearly half of a two-year sabbatical sailing around the Iberian Peninsula on a 35-foot Jeanneau Sunrise. But now the 33-year-old Briton is back in the thick of City life. What's he doing? Why, churning out market information, of course.
Late last year, after a stint as a bond broker at Tradition Financial Services, Fuller and a partner, Fabrice Ben Hassine, 32, formed an online news-gathering operation called BrokerTalk. Within weeks of the July launch, the three-person London-based firm had signed up more than 40 institutions for monthlong free trials.
Bloomberg can relax, for now. BrokerTalk reports on one subject: the institutional trading activities, known as flow, that move markets. "We've all been asked what's happening in a given market and not been able to say," explains Fuller. "There's a definite niche for information on flow."
Electronic dealing has heightened interest. The more that trading in derivatives, cash bonds and foreign exchange -- BrokerTalk's beats -- occurs on-screen, the harder it becomes to pick up the subtleties of flow. "Because the business is moving away from centralized pit trading, you no longer have traders sharing a central source of market information," says Simon Hollingshead, a partner of Sigma Forex in Sheffield, England, who immediately signed up as a client. "BrokerTalk helps to centralize it for me."
Says Fuller: "To understand flow, we go to our contact list, including pension and hedge funds. If we get three good answers and they all sound the same, we'll put it out."-- Jeffrey Kutler
Every day thousands of research reports, investment ideas and other e-mails to fund managers pile up and go unread. "If those messages get stuck in clients' in-boxes, then clearly we're not providing the quality service that they want from us," declares Stuart Taylor, Merrill Lynch & Co.'s head of European debt markets e-commerce.
London-based start-up Clovis has a solution to that problem: a software enhancement that lets the sell side customize e-mail communications to clients by creating special folders within Microsoft Outlook.
In this special-delivery system, dubbed Clovis for Outlook, analyst reports go directly into a portfolio manager's folder labeled, say,"equity research" rather than into the general pool of e-mail.A big arrow indicates that a fresh communication has arrived. Clovis sorts designated e-mails into their proper folders. What's more, brokers can update data in the "smart folders" without clients' having to click a mouse. Both senders and receivers must install the system.
"We use what's already on the desktop," says Clovis CEO Rikki Tahta. "But Outlook e-mail is a very low common denominator that doesn't satisfy the sales guy or analyst who is trying to provide a bespoke service to a client. We bring order to the chaos." The former Dillon Read & Co. banker says that several big investment banks have adopted Clovis.
The system isn't just for research or marketing communications. In May, Merrill -- which has a stake in the Clovis company -- began using the technology to auction corporate bonds. "When we want to communicate specifically with our clients, a one-size-fits-all hub may not be appropriate," explains Merrill's Taylor. The firm can send other dealers all the pertinent information on bonds that are up for sale using Clovis folders that are continually updated. The dealers submit bids via Clovis.
"We encourage the buy side to interact with other dealers on Clovis," says Taylor. "The more dealers that are on this, the more the industry saves money" on developing fancy trading technology. "An e-mail platform gets us point-to-point, real-time connectivity at low cost," he adds.-- J.K.