European fund managers have been shifting trading to the afternoon due to a lack of liquidity in the region in the morning according to K&K Global Consulting.

Anita Karppi, managing director of K&K Global, told Markets Media that liquidity remains a primary concern for asset managers. The consultancy held its eighth London buy side debate in London last Friday.

“There has been a behavioural shift with more business being done at the close because it is difficult to find liquidity in the early morning. One US fund management house in Europe said they have stopped trading early in the day,” Karppi said.

Paul Squires, head of trading at Axa Investment Managers, said in an email to Markets Media that his firm had not noticed a lack of liquidity in European stocks in morning trading.

However he gave two factors that make the afternoon session more liquid.

“The US accounts wake up and get more involved; and the index/ETF managers will target the close for their execution so there is a natural spike of volume leading up to that point,” Squires said.

Other issues arising from the K&K’s London buy side debate were the long time taken to complete IT projects, the increased focus on compliance and the need to standardise trading data.

Concerns over liquidity were the most important issue for the buy side in K&K Global Consulting’s survey.

The consultancy interviewed 40 European equity traders from 40 different asset managers between March and June this year. In the study 86% of buy-side firms were either uncertain or did not think that liquidity would return by the end of this year, with half not sure that it will return in 2014.

The other important issues cited in the survey were transaction cost analysis, commission sharing agreements and sell-side restructuring.