Trumid President Talks Electronifie Acquisition

The world of electronic trading platforms for corporate bonds is not a big one, and it doesn’t take long for news to spread among the various vendors. That’s why Mike Sobel, president of Trumid, was able to catch wind of Electronifie’s efforts to raise capital fairly quickly, and when the vendor began looking at different strategic options beyond an infusion of capital, Sobel recognized an opportunity for his company.

For Sobel, the acquisition of Electronifie, which was announced last week, seemed like the right move at the right time.

“We are at a spot where we are investing in the growth of the business in a number of different ways. On the technology front. On the data science front,” Sobel tells WatersTechnology. “This was an opportunity to quickly add a big chunk of clients and build out our client network. That can happen organically or through acquisition. This became an opportunity to increase scale in a step-wise fashion.”

Sobel says conversations about a possible deal began in the late summer/early fall. The tipping point for the acquisition, according to Sobel, was when Trumid was able to present a plan for seamlessly transitioning Electronifie’s clients onto a unified platform from a tech and regulatory perspective.

“That was the first angle we pursued,” Sobel says. “As it became clear that was quite achievable, the rationale for the deal all really kind of fell into place.”

Transition Team

Once the deal is closed, which is expected to occur early in the second quarter, Trumid will have increased its user network by 20 percent. Over 350 firms will sit on Trumid Market Center, the firm’s all-to-all trading network for corporate bonds.

Sobel was not able to disclose specifics of the deal.

Part of that transition will include adding members of the Electronifie team to Trumid, Sobel says. The vendor will build out its tech, data science and sales teams with employees from the acquired firm. Amar Kuchinad, Electronifie’s CEO, will also join Trumid’s management team.

As for the actual platform, Sobel says there are a handful of minor things, albeit enhancements, that will be implemented from Electronifie. Specifically, he cited the progress the vendor has made when it comes to integration with order management systems (OMSs). That said, it will still be business as usual on Trumid’s platform.

“The Trumid Market Center will remain the ATS that people see. The major features of the platform will remain consistent. In terms of the big elements of the protocols, there won’t be a tremendous amount of change,” Sobel says. “It’s more back-end trade processing stuff. We will expand the number of trade intermediaries, so that’s helpful for clients. That adds a new element of trade processing and post-trade stuff that will get incorporated. But in terms of the trading protocols, it’s pretty minor stuff that I think does not represent changes to the sort of protocol as people have understood it in the past.”

Long Road Ahead

And while the Electronifie acquisition is a nice addition to Trumid’s market share, there is still one clear leader in the space. MarketAxess maintains the largest electronic platform for corporate bonds, and seems unlikely to give up its lead anytime soon.

Sobel doesn’t deny MarketAxess’ dominance, but points to the progress made by his company in recent months.

“Obviously, MarketAxess is the 100-pound gorilla in the space. There is no question. But after that, in all-to-all round lot trading, we think we’re emerging as a winner in the space. We’re seen material growth in volumes. We have 20 of the top 25 and more than 40 of the top 50 asset managers in the globe on the platform. We’ve got more than 60 broker-dealers. We see significant participation from the majority of the users on the platform,” Sobel says. “We are successfully trading round lot sizes of both commoditized bonds and less liquid bonds. So we are seeing real, all-to-all liquidity on large sizes, and I don’t really think any of our competitors can say that at this point.”