BlackRock Inc., the world's largest money manager, andMarketAxess Holdings Inc. are creating an alliance for a unifiedbond-trading platform.

BlackRock's Aladdin Trading Network, which the investment firmsaid last year it planned to start to allow investors to bypassinvestment banks, will route trades through MarketAxess, the ownerof an electronic bond and derivatives-trading system, the companiessaid in an e-mailed statement today.

“Our two firms have a long-standing relationship, complementarystrengths and a shared belief that the gradual shift towards moreopen trading in fixed income will require broad participation fromthe buy side and behavioral change among investors,” RichardPrager, head of BlackRock's trading and liquidity strategies group,said in the statement.

BlackRock Solutions' Aladdin investment-management system, which offers access toits trading network, hosts $14 trillion in BlackRock and Aladdinclient assets, and more than 1,000 asset managers, insurancecompanies, other investment firms and broker-dealers are activeusers of the MarketAxess platform, according to the statement.

“This partnership enables Aladdin clients to tap into a deeperliquidity pool without ever having to leave Aladdin, whilemaintaining their existing trade workflow,” Ryan Stork, global headof BlackRock's Aladdin business, said in the statement.

Wall Street dealers traditionally act as middlemen bywarehousing bonds until customers seek to buy them. That model ischanging as U.S. and international rules meant to make the bankingsystem safer have prompted dealers to cut the amount of debt theyhold, reducing liquidity in the market.

BlackRock, which manages about $3.9 trillion in assets, had saidlast year that its bond-trading system would match clients' ordersusing its own platform, rather than relying on Wall Street firms orother electronic networks to trade their bonds.

Bloomberg

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