Hi, my name's Matt Turner.
I'm the executive editor here at Business Insider,
and I'm very happy today to have Billy Hult,
the president of Tradeweb, which has gone public,
here to talk.
Thank you for having me.
Just to start, why IPO now?
What brought that decision about?
Why now?
We just felt like it was the right time.
You know, the company has had such an interesting
ownership structure over all these years,
and we felt it was the right time to be a public company.
We felt like the businesses had gotten mature enough.
We've had these great partners over the years,
and we feel really confident
we're gonna continue to have great partners.
But we just felt like this was the right time for us.
And how did you find the IPO process,
and what advice would you have for anyone thinking
about it?
It's an interesting process.
You gotta pace yourself kind of through it.
You know, it is kind of great to kind of go through
it from the very, very beginning.
I found all the different bankers that
we worked with to be really great.
There was a lot of teamwork involved.
It was amazing to kind of be on the road
and talk to the investors and kind of deliver the story,
you know, really the story of the company.
That was really rewarding.
It was a whirlwind.
You know, we just got back from our roadshow
really on Tuesday evening.
We kind of started in Boston then we went to the West Coast,
San Francisco, LA, Denver, Kansas City, Chicago.
It's a pretty cool thing though to kind of
deliver the message
and really deliver the message of your company.
And how did...
obviously we can see how the stock is trading.
But what were the questions you were being
asked on the roadshow and what was the
kind of mood of investors you had talked to?
The mood was really positive.
Sometimes you get really interesting questions about just
the arc of the business and how these markets
went electronic.
And then obviously, kind of how much more room
there is to go around all of these, these marketplaces.
There's no real...kind of by the end,
you've heard a lot of the questions,
so you're not getting any kind of big curveballs.
But I found the investors to be, you know,
really excited about our story and all
those conversations went really well.
What does it say about the marketplace now
as Tradeweb going public, Market Axess as
a competitor also public.
Yep, yep.
What does it say about the evolution
of electronic markets and electronic bond trading,
fixed income trading in particular, that there's
now those two companies listed?
I think it's, you know what,
it's a great question by the way.
I think on some level, maybe it's a statement around
how mainstream electronic trading has become.
You know, I remember, I've been at Tradeweb since 2000.
I've been the president of the company since
I think it was '07 or '08.
I remember when electronic trading wasn't mainstream,
and I remember when you had to sort of fight
for every trade and sort of work really hard
to get the clients off of the phone and onto the mouse.
I think it's some version of a statement just around the
mainstream-ness of the electronification on fixed income.
In a good way.
What does going public allow you to do as a company now?
I think it, one thing it allows us to do is,
in a funny way, kind of have this interview.
I think the recognition and the brand of the company
is gonna change.
I think that's a good thing.
It's obviously gonna give us a currency in the market
and allow us to look at interesting things.
You know, so I think it's gonna do a lot of
positive things for the company.
You talked about the journey of electronic marketplaces.
Yeah. Where are we
in that evolution?
You know, it's a good question.
That's one of the questions, by the way,
you get kind of on the road.
So I should be decent at answering it.
It sort of depends on the market that you're talking about.
That being said, what's interesting is all of these markets
that we are in still have room to grow.
You know, Tradeweb started off in the US government
bond market all these years ago,
and there's still room to go
in government bonds around electronification,
so they all kind of do.
But depending on the market that we're talking about.
You know, in baseball world, it would be
kind of like fourth or fifth inning
in a lot of these different businesses that we're in,
and that gives you a lot of kind of confidence and energy
to kind of get after this kind of second half of it all.
You talked about the government bond market.
Yeah.
What still needs to or can evolve that?
You talked about it's still changing.
Yeah, I always kind of think about...
When I think about trades that get electronified,
and then I think about trades that aren't
getting electronified,
sometimes I think about those types of trades
as large market-moving trades or any trade
that has some version of complicatedness,
and therefore negotiation.
The clients are getting so much more sophisticated
in terms of how they engage with the market.
We have a new functionality that we call AIX,
which was a pretty nice hit as we talked
about it on the road,
and that's allowing clients to find liquidity
more efficiently and more easily out in the marketplace.
It's a search, right?
Sometimes when we talk about what Tradeweb does,
we talk about it in terms of just a basic search:
a search for liquidity.
And as that search gets more sophisticated,
I think we're gonna see obviously further electronifications
of the market.
And you mentioned liquidity there.
Obviously, a hot topic always.
Yeah, yeah.
So where are we?
How do you see that and that discussion evolving also?
It's, you know, it's good.
It's changed a lot.
One of the consequences of regulation
has been around how different banks are set up,
fundamentally set up in fixed income,
and that puts a pretty strong sort of stress
or premium on getting more efficient
in terms of how you search for liquidity.
One of those, obviously, is the all-to-all trading,
which is the hot topic in credit.
But in the rates market, it sometimes is about these things
that we call AIX,
which is an algorithm.
It's a market data feed that allows clients
to be more efficient in terms of how they find liquidity.
You know you asked me what inning
we are around electronification.
We're still kind of mid-innings around the real
sophistication of the market,
and the sophistication is going to
help the electronification going forward.
And in terms of some of the markets that are newer
to electronification.
Yeah.
What are you most excited about?
Where do you see opportunity?
You know, you'd almost still describe kind of credit
as newer in some ways, even though Market Axess
is obviously a great company,
and we've been in credit the last couple years
making a significant amount of progress.
But I feel like there's still a lot of room in credit
to go,
and then I always kind of think in
some of these subset markets.
So Tradeweb's really strong in the TBA mortgage market.
I think that there's a ton of room in these subset markets.
So for example, specified pools in mortgages, I think,
could have a lot of benefit from electronification.
And what impact does this electronification
having on kind of buy-side dealing desks and on
the sell-side also?
How are they changing to adapt to this?
Again, I think they're getting more sophisticated.
I think it, ultimately, it brings down the cost of trading.
We're doing something in credit that we call net-spotting,
which is both efficient and a cost-saver to the buy-side.
So everybody's looking at how they can get
more sophisticated,
run their businesses more efficiently,
and obviously, savings is a big deal in the market.