Felix Mason, a former managing director at BlackRock and head of its London equity trading desk, has joined Linear as part of a team that carries out trades for smaller and medium-sized asset managers and hedge funds.
Mason left BlackRock in July and started at Linear this month. He will oversee the day-to-day trading activities of its outsourced trading clients, including high and low-touch activity.
He joined BlackRock in 2010 having previously worked at Merrill Lynch Investment Managers and Mercury Asset Management.
Mason reports to Paul Walker-Duncalf, BlackRock’s former global head of equity trading who left in May 2015 and joined Linear earlier this year to head up its outsourced trading operation.
Walker-Duncalf said of Mason: “He has dealt with some of the most demanding fund managers in the industry and his appointment is a sign of confidence in what we are building here and in the outsourced model. It is a big step-up for us.”
Walker-Duncalf believes an increasing number of fund managers will outsource elements of their trading desks to cut costs and as they grapple with a more onerous regulatory environment.
He told FN in May that the cost of a “fully loaded” trader has been independently estimated at as much as £300,000 a year. That figure includes salary, pension and infrastructure costs such as a Bloomberg terminal.
He said on October 27: “Trading has become very commoditised and fee compression and cost pressure on asset managers means outsourcing has become a highly viable option.”
He added: “When I joined Linear, I expected interest from smaller clients, but we are are seeing increased interest from mid-sized clients as well.”
Another factor that Walker-Duncalf believes will drive the change is the EU’s revised trading rulebook, the Markets in Financial Instruments Directive, coming into force in 2018. Mifid II will force a wide variety of costs on asset managers, including new rules on paid-for research and requiring them to more vigorously pursue best execution.
Walker-Duncalf said that costs “will only increase as Mifid II fast approaches, with its new requirements around best execution, transaction reporting and unbundling”.