"Killik & Co can, with justification, claim to be the private investor pioneers of the new fixed income market in the UK. I remember the fixed income markets of the 1960s and 1970s that were actively traded by private investors dealing through the London Stock Exchange. Unfortunately, over the subsequent two decades this market migrated to the Eurobond market which was primarily designed for institutional investors. As LSE issues were redeemed they were replaced by Eurobonds, and private investors became increasingly excluded.
For the past ten years, the Partners and I have been pressing for the reintroduction of a fixed income market in which private investors can participate. The common counter argument was that private investors could buy Bond Funds that held the Eurobonds that they couldn’t trade. However, it has been our position that whilst Bond Funds can be an attractive alternative they are not Bonds, they have different characteristics and they trade differently.
As a Board Member of The Association of Private Client Investment Managers and Stockbrokers (APCIMS), I continued to lobby and was invited to chair a sub-committee of the Board tasked with trying to find a resolution. The committee was making slow progress when I had a conversation with Xavier Rolet, shortly after his appointment as CEO of the LSE in 2009. The upshot of that conversation was the creation of the Order-book for Retail Bonds (ORB) which was launched by the LSE in 2010.
The subsequent level of demand for Fixed Income securities from UK private investors, suffering from the very low interest rates paid by the Banks and Building Societies, has been significant and more than justified the confidence of those far sighted enough to believe that there was latent demand that could be harnessed. The ORB has been a resounding success and the GBP raised from UK private investors is already in the billions.
Killik & Co continues to be very active participants and supporters of this market and we are one of, if not the only, retail Broking house to employ Credit Analysts to research this market and to support the advice given by our Brokers."