Olivetree Securities, a London-based boutique agency brokerage, is developing a suite of tools to help buy-side dealing desks add greater value to the investment process.
The first product rolled out by the broker's new Olivetree Solutions business will provide traders with the data needed to determine the timing of investment decisions and subsequently add alpha to portfolio performance.
“We believe dealing desks are ideally situated to add significant value in the investment process,” Daryn Kutner, CEO, Olivetree, told theTRADEnews.com. “We are using Olivetree Solutions to help provide dealing desks with enhanced tools to help this progression.”
Using the trade timing management tool, buy-side traders will be able to instantly pull up information related to, amongst other things, the capital structure of listed firms, thereby helping them to manage the dynamics that can influence stock performance. The tool is expected to be particularly useful when timing trades required as part of a portfolio rebalancing.
“We have worked with our customers to understand the most relevant information they need when executing orders and combined this with our own trading analysis,” said Kutner. “The tools will hopefully help traders with hundreds of stocks on their blotters to be as informed as possible by giving them all the information they need at a glance. More importantly, it will provide back-tested indicators to support their trading decisions.
“This approach facilitates a more meaningful conversation between the trader on the dealing desk and the portfolio manager,” he added.
The new tools have been in production since the start of this year, following the hires of James Netherthorpe as chief operating officer and Tom Doris as managing director, both of whom worked at hedge fund Marshall Wace.
Doris, who had a hand in building Marshall Wace's quantitative execution systems, said that an understanding of the most relevant types of data required by the buy-side underpinned Olivetree Solutions' approach.
“It was important to define what was anomalous,” said Doris. “We did a lot of normalisation and filtering at the back-end so it is easy to drill down into unusual events and make intelligent observations about a portfolio.”
Kutner founded Olivetree in 2009, having previously worked at Morgan Stanley for 13 years, where he had stints managing the firm's European and US equities businesses.