Fixed Income Liquidity: Sovereign Wealth funds to the rescue?

We've covered the topic of Fixed Income liquidity at length here before (a list of links follows this post).  We've discussed the possibility of non-bank financial institutions providing liquidity and we have see Virtu and JPMorgan sign an interesting deal 

So - why not sovereign wealth funds to provide fixed income liquidity - for a price?


They are

• patient
• capital heavy
• unconstrained by capital adequacy and other regulations
• well respected counterparties in the market

They appear (to an outsider) to lack the technology to do this - pricing engines, market connectivity, risk management, kill-switch.  But none of that is particularly hard.


What stops ADIA, CIC, KIA, ABP, GIC or others from starting a liquidity provision business? 

http://www.swfinstitute.org/fund-rankings/

Bond fund distance, liquidity and trading

Fixed Income Trading: Buy-side desk of the near future?
Fixed Income: New market for Corporate Bonds
Fixed Income Trading: New venues
Third Avenue, the next crisis in the Bond market and Liquidation Risk...
If not banks, then who?
Fintech innovation: Bond trading
Buy-side analytics: FI BestEx and RFQ Broker selection
Sell-side Fixed Income connectivity reference implementation
Buy-side desktop real-estate in a new Fixed Income world??
Bond liquidity, collective investments and fairness
Project Neptune, MTFs, SEFs, the central limit order book for corporate bonds and the loch ness monster
What we’ve got here…is failure to communicate (September 28th 2011)
Liquidnet for Fixed Income (June 24th 2008)
What’s the future for Institutional buy-side Fixed Income trading? (April 21st 2008)