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Sustainability is just one element that distinguishes the best quality companies in the world. This year, this award goes to the bond trading platform Marketaxess. The fintech works closely with Swiss banks.

Marketaxess is a company that is also well known among Swiss banks. Founded in 2000 by Richard McVey, the fintech is the pioneer in electronic bond trading, a real disruptor in a business that traditionally executes transactions over the phone.

In Switzerland, former UBS banker Erik Tham manages Marketaxess operations, and he does so with some success. It is known that Credit Suisse Asset Management, Pictet, Julius Baer and Zürcher Kantonalbank use the electronic platform.

$1.1 billion saved for customers

It saves them a lot of money: In 2020 alone, Marketaxess clients spent $1.1 billion less by executing bond trades through the platform. That’s just one reason why Swiss asset manager Hérens Quality Asset Management (HQAM) named Marketaxess the best in the world in its Corporate Excellence Award, published Thursday.

According to HQAM’s analysis, Marketaxess has become the market leader in this trading area thanks to constant innovation and organic growth. The platform is open: Participants can trade with each other, which practically halves transaction costs compared to telephone trading.

Highly scalable business model

For Marketaxess, in turn, the platform is highly scalable, which is reflected in the net margin of 43 percent. In addition, Marketaxess pursues a shareholder-friendly dividend policy, which is not a matter of course for US companies. The basis is a sustainably growing business model. 2020 had so far been a record year in terms of trading volume, sales, and operating profit.

To a certain extent, HQAM’s Corporate Excellence Award also reflects the investment policy of the Pfäffikon-based asset manager, which is based on the so-called Quality Style. The systematic analysis incorporates dozens of business criteria factors that have to meet quality standards.

Quality is a prerequisite for ESG

In the current sustainability boom, such quality standards are the best guide: after all, companies that achieve the best ESG scores also tend to have the best quality factors that can be drawn from a balance sheet or annual report.

On the occasion of this year’s Corporate Excellence Awards, HQAM writes that the best companies this year were characterized by a stable business model even during the Covid 19 crisis. The best companies are generally controlled by families or management, there are very few changes and fluctuations at CEO and management level, the companies grow primarily organically, take issues such as corporate social responsibility (CSR) seriously, and are ahead of their competitors in terms of emissions values.

Disruption can promote quality in the sector

The fact that Marketaxess, a company from the financial sector, won may come as a surprise, because global banks in particular are not distinguished by HQAM characteristics and are consequently not included in the Corporate Excellence Award.

But Marketaxess is a fintech that is actively shaping the transformation of the financial industry. Accordingly, disruptors can certainly be regarded as promoters of quality in the financial industry. In 2019, HQAM had already awarded the US company SEI Investments, a service provider for the investment industry, a financial company for the same reasons. In Switzerland, it had often been the Zug-based Partners Group that had scored best at HQAM in previous awards. In 2021, it will be Ems Chemie.