Large blocks of shares — institutional orders that are not well suited to exchange trading — can be directed to a number of competing liquidity pools. Luminex Trading & Analytics differentiates itself with a low-cost-utility approach. “Independent and unconflicted” is how Jonathan Clark describes the alternative trading system, which has 185 subscribers. “There are no pockets being lined,” he says in a phone interview.
Boston-based Luminex says it was “created by the buy side for the buy side.” Its owners are Fidelity Investments — Luminex’s technology provider — and eight other leading investment managers: Bank of New York Mellon Corp., BlackRock, Capital Group, Invesco Advisers, J.P. Morgan Asset Management, MFS Investment Management, State Street Global Advisors, and T. Rowe Price. Fees are kept close to break-even, and excess cash flow is reinvested in the business.
“Clients’ desire for us to be successful” helps fuel Luminex’s growth, says Clark, 49, who has been Luminex’s CEO since August 2015.
With average order fills of 34,000 shares, according to its website, Luminex had a record month in February, and it consistently ranks at or near the top in average block-trade size compared to other venues tracked by the Financial Industry Regulatory Authority.
Clark — who was a member of the quantitative team at Merrill Lynch Investment Managers when the firm was bought by BlackRock in 2006 — says Luminex introduced a new conditional order type in January, and is working on a new user interface.
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