Tradeweb Acquires CodeStreet LLC – PR Newswire
March 3, 2016 \ 12 Comments
Full Article: PR Newswire
The acquisition of CodeStreet enables Tradeweb to pair effective trade execution and processing with better trade identification tools for the buy-side and enhanced workflow management for liquidity providers, which will enable buy-side investors to better source liquidity.
Everyone knows sell side pre-trade workflow tools have made sense for a long time and been tried through various means going back 10+ years. Many large dealers have built multiple iterations of proprietary systems. Bloomberg went around for years marketing that they were building a ‘Codestreet like product’ that has now become DASH. MarketAxess built SalesAlert And of course there is Algomi’s ‘meteoric’ rise since its inception in 2012. There are many that believe the successful implementation of such a tool is a critical step to maintain a successful credit trading business. These systems are all about improving communication of… Read more »
I like this acquisition. A lot of the macro issues discussed here, balance sheet, technology advancement, regulation etc. historically make the electronic execution space more competitive and drive their execution costs down. Expanding into other parts of the workflow trade chain helps diversify the credit offering, provide some synergies, add stable revenue to the mix, and offer some potential opportunities in the OTC execution, data, and processing space. The information workflows are also focused on helping dealers and sales to generate more high margin business (read, NOT electronic trading) and become more efficient. The big kicker and downside is, you… Read more »
Agree with all the comments. Perhaps taking another angle on this it is fairly obvious to me that a company like TradeWeb with it’s shareholder base, supposed connectivity to it’s client base and capital behind it should be able to grow their business organically to become best in breed in a challenging market yet they continue to attempt and buy their way to the top. My money is on another failed acquisition with no clear mission statement on how to integrate, inter-operate or develop anything new.
This is an interesting acquisition. At its’ core, Codestreet is a CRM. Data quality and usage are the lifeblood of any CRM. You don’t need to look far to see that even salesforce.com and CRM’s in mature sectors struggle with these exact issues. FI CRM’s are not mature by any means. CS is the only real player to have delivered a meaningful pre-trade workflow solution (CRM) with decent adoption and is generally “good” functionality. That said, data quality has a variety of factors that affect it: -Every feed from every customer -Every trader and SP fully immersed in the platform… Read more »
Codestreet is a good acquisition for Tradeweb. The current woes in the secondary market are caused by lack of confidence. What is the real price for a block of bonds? I only know that if I know where blocks trade, what kind of account holds them, and the turnover behavior of those blocks. Knowing the last two gives me the confidence to provide depth to find out the real price where blocks trade. Codestreet, if integrated and used in sales workflow provides the information from my salesforce that I need as a trader to gain confidence over my peers translating… Read more »
This should be a great acquisition and is testimony to the efforts that CodeStreet has made to lead the industry since its inception…smart guys building smart products. The questions that comes to my mind, however, isn’t about CodeStreet or TradeWeb, but about Algomi. What happens to them?
More thoughts. Codestreet has been shopping itself for years. What changed at TradeWeb leading to an acquisition now? TradeWebs progress since its re-launch in Oct 2014 has been underwhelming. A leadership change in their credit business last year has not appeared to produce any significant changes to this point. Their ‘streaming quote’ initiative was the wrong thing at the wrong time (everyone seemed to know that except TradeWeb). Their ‘me too’ approach at a lower price point was never effective, always playing ‘catch up’ to MarketAxess. With this acquisition, maybe they are onto something. Codestreet gives them the opportunity to… Read more »
Old tech meets old tech?
Use of DealerPool could be interesting…however, innovation at Tradeweb has historically been applying RFQ to different products. Will governance allow something more innovative to happen? Not to mention the challenges of integrating the acquisition.
Probably more in the Iceman camp on this one.
DealerPool needs to be enhanced to really gain traction. TW provides CDP more and larger counterparties, which is a positive. However, it remains to be seen if this is enough. The CDP D2D protocol is predicated on reducing information leakage and having two negotiating counterparties. In the current IDB market, voice brokers get an engaged and stalemated negotiation to transact by introducing interests of other parties. (“If you don’t hit this bid, I have another seller who I think will.”; “Are we clear?”, etc). This does not work in the existing iteration of the protocol. I think a hybrid model… Read more »
Attachment On the surface, this acquisition makes a ton of sense, but there is an inside joke that is being missed here, and I for one will not let a good laugh go to waste. What nobody is talking about (when I say nobody, I’m talking to the media here) is what could be considered the largest fixed income electronic trading dumpster fire of the past decade. In 2014, to great fanfare and great cost, Tradeweb launched their new (if you don’t count all the previous attempts) RFQ platform for corporate bonds. This latest edition of Tradeweb’s credit platform… Read more »
Great. I need a new keyboard. Pirates?!? Aaaarrrggghh matey!
CS has a robust tool, though that comes with longer integrations. I don’t see bulge brackets deploying this with their info in the cloud. It also does not have MA RFQ’s. If MA significantly increased the value prop of their sales tool, then along with MA RFQ’s in its sales tool, it would be that much more difficult for others to gain traction against.
fka Viper Viper.
Another thing I don’t understand: What sellside or buyside firm would disclose more info to a transaction platform? I could have sworn that I read something about information leakage being bad. Isn’t TW just an idb with an electronic front end? Their goal is to DO MORE TRANSACTIONS. What sellside or buyside firm would open their kimono to a voice broker? Isn’t this also true about MA? Why would users pay for the privilege of giving up more inside information only to be more beholden to MA? Is the “logic” along these lines: “Hey MA, some of my brethren talk… Read more »
S&P: All That Bond Market Illiquidity is Bad for Bond Funds, But Not Banks – BloombergJuly 1, 2015
Bankers and Regulators Voice Fears on Bond Market VolatilityMay 6, 2015
BCG Report – Adapting to Digital Advances: Global Capital Markets 2015May 14, 2015