Tags: Prime Brokerage Software, Prime Brokers Software, Software for Prime Brokers, Top Prime Brokerage Software Platform, Prime Brokerage Software Solutions, Prime Brokers, Prime Brokerage
Below is a note from a recent HedgeFund.net conference about the profitability of prime brokerage. While short-term there is a downtown in volume and assets on the books of many prime brokerage firms, I believe the industry is still very profitable for dozens of firms. While some groups are suffering, many are seeing huge gains in assets over the last few quarters. Here is the article quote:
Prime brokerage is dead or, in the aftermath of the collapse of Lehman Bros., at least on life support, a panel at a HedgeFund.net conference Wednesday said.“I don’t think the prime brokerage model is dead, but it is definitely in a coma,” panelist Richard Del Bello offered. Read more…
Tags: prime brokerage, prime broker, prime brokers, prime brokerage profits, profitability of prime brokerage industry, investment banking, investment bank
Below is a note from a recent HedgeFund.net conference about the profitability of prime brokerage. While short-term there is a downtown in volume and assets on the books of many prime brokerage firms, I believe the industry is still very profitable for dozens of firms. While some groups are suffering, many are seeing huge gains in assets over the last few quarters. Here is the article quote:
Prime brokerage is dead or, in the aftermath of the collapse of Lehman Bros., at least on life support, a panel at a HedgeFund.net conference Wednesday said.“I don’t think the prime brokerage model is dead, but it is definitely in a coma,” panelist Richard Del Bello offered. Read more…
Tags: prime brokerage, prime broker, prime brokers, prime brokerage profits, profitability of prime brokerage industry, investment banking, investment bank
The following articles was initially published on PrimeBrokerageGuide.com. The number of stories coming out about prime brokerage hirings, acquisitions, and office moves has doubled over the past two years. This industry is going through some huge changes right now. Here is a recent article out on CitiGroup and Bank of America making changes to their platforms.
Citigroup (C) and Bank of America (BAC) are boosting their prime brokerage groups to take advantage of disruption in the business amid the financial crisis, according to published reports.Prime brokerage is the business of providing trading and lending services to hedge funds. Citi has added 18 people this year to its global prime brokerage operations, The Wall Street Journal says. BofA, through its recent acquisition of Merrill Lynch, plans to hire 40 employees for its global financing business. The 800-person group includes prime brokerage and securities lending, among other businesses, the Journal says.
Goldman Sachs (GS) and Morgan Stanley (MS) have long been the leaders in prime brokerage, the article says. But others, including Citi and BofA had been looking to expand their business for several years now. source
Learn more at http://PrimeBrokerageGuide.com
Tags: prime broker, prime brokerage, prime brokerage industry, prime brokers, prime broker acquisitions, prime brokerage statistics
The following articles was initially published on PrimeBrokerageGuide.com. The number of stories coming out about prime brokerage hirings, acquisitions, and office moves has doubled over the past two years. This industry is going through some huge changes right now. Here is a recent article out on CitiGroup and Bank of America making changes to their platforms.
Citigroup (C) and Bank of America (BAC) are boosting their prime brokerage groups to take advantage of disruption in the business amid the financial crisis, according to published reports.Prime brokerage is the business of providing trading and lending services to hedge funds. Citi has added 18 people this year to its global prime brokerage operations, The Wall Street Journal says. BofA, through its recent acquisition of Merrill Lynch, plans to hire 40 employees for its global financing business. The 800-person group includes prime brokerage and securities lending, among other businesses, the Journal says.
Goldman Sachs (GS) and Morgan Stanley (MS) have long been the leaders in prime brokerage, the article says. But others, including Citi and BofA had been looking to expand their business for several years now. source
Learn more at http://PrimeBrokerageGuide.com
Tags: prime broker, prime brokerage, prime brokerage industry, prime brokers, prime broker acquisitions, prime brokerage statistics
Here is a short article excerpt on how banks have once again begun to expand their prime brokerage operations. I personally have not heard of any hiring sprees by prime brokerage departments or mini primes over the last two months, but I do know that with a wealth of experienced prime brokerage professionals in NYC without bonuses or sometimes employment that several prime brokers are being opportunistic and bringing the best professionals they can find in house. Here is the article excerpt:
During the bleakest days of last October–November, few banks were touting their prime brokerage operations. Hedge fund liquidity dried up, banks lost appetite to lend to these institutions, and prime brokerages were backed into a corner. However, this business is making a comeback and banks are starting to rehire, as Hugh Chow reports.
A hiring drive by Barclays Capital and Bank of America Merrill Lynch is highlighting the ambitions of smaller players in the opaque world of Asian prime brokerage, an industry that seemed to be on the ropes after the collapse of Lehman Brothers late last year.
Barcap is looking for a head of prime services Asia-Pacific, after advanced negotiations with ex-UBS banker, Matt Pecot, fell through at the 11th hour last week. The firm’s prime services division includes a prime brokerage – the business of lending and providing other trading-related services to hedge funds.
Meanwhile an internal announcement on May 18 by BoA Merrill heralded the appointment of former Tremont Capital Management and Morgan Stanley man James Fallon as a director on the Asia-Pacific financing sales team. Fallon’s job will be to drive the business of lending to hedge fund clients in this region. source
Tags: Prime Brokerage, prime broker, prime brokers, Prime Brokerage Firms Hiring, Open prime brokerage positions
Here is an article I found on the recent revival of the prime brokerage industry. There have been several of these types of articles coming out over the past several weeks:
The world of prime brokerage has had a traumatic eight months. “The industry changed when Lehman went under. Hedge funds were suddenly made aware of counterparty risk, and they realised they couldn’t put all their eggs in one basket,” said Eddie Guillemette, head of international financing sales at Bank of America Merrill Lynch. The situation appears to be improving, and banks are starting to recruit again. Barclays Capital and BofA Merrill both initiated hiring drives in Asia-Pacific. source
Tags: Prime Broker, Prime Brokers, Prime Brokerage, prime brokerage industry, business of prime brokerage, trading, clearing, capital raising, capital introduction
Here is a short article excerpt on how banks have once again begin to expand their prime brokerage operations. I personally have not heard of any hiring sprees by prime brokerage departments or mini primes over the last two months, but I do know that with a wealth of experienced prime brokerage professionals in NYC without bonuses or sometimes employment that sevearl prime brokers are being opportunistic and bringing the best professionals they can find in house. Here is the article excerpt:
During the bleakest days of last October–November, few banks were touting their prime brokerage operations. Hedge fund liquidity dried up, banks lost appetite to lend to these institutions, and prime brokerages were backed into a corner. However, this business is making a comeback and banks are starting to rehire, as Hugh Chow reports.
A hiring drive by Barclays Capital and Bank of America Merrill Lynch is highlighting the ambitions of smaller players in the opaque world of Asian prime brokerage, an industry that seemed to be on the ropes after the collapse of Lehman Brothers late last year.
Barcap is looking for a head of prime services Asia-Pacific, after advanced negotiations with ex-UBS banker, Matt Pecot, fell through at the 11th hour last week. The firm’s prime services division includes a prime brokerage – the business of lending and providing other trading-related services to hedge funds.
Meanwhile an internal announcement on May 18 by BoA Merrill heralded the appointment of former Tremont Capital Management and Morgan Stanley man James Fallon as a director on the Asia-Pacific financing sales team. Fallon’s job will be to drive the business of lending to hedge fund clients in this region. source
This article was first published on Prime Brokerage Guide.com.
Tags: Prime Brokerage, prime broker, prime brokers, Prime Brokerage Firms Hiring, Open prime brokerage positions
Here is a short article excerpt on how banks have once again begin to expand their prime brokerage operations. I personally have not heard of any hiring sprees by prime brokerage departments or mini primes over the last two months, but I do know that with a wealth of experienced prime brokerage professionals in NYC without bonuses or sometimes employment that sevearl prime brokers are being opportunistic and bringing the best professionals they can find in house. Here is the article excerpt:
During the bleakest days of last October–November, few banks were touting their prime brokerage operations. Hedge fund liquidity dried up, banks lost appetite to lend to these institutions, and prime brokerages were backed into a corner. However, this business is making a comeback and banks are starting to rehire, as Hugh Chow reports.
A hiring drive by Barclays Capital and Bank of America Merrill Lynch is highlighting the ambitions of smaller players in the opaque world of Asian prime brokerage, an industry that seemed to be on the ropes after the collapse of Lehman Brothers late last year.
Barcap is looking for a head of prime services Asia-Pacific, after advanced negotiations with ex-UBS banker, Matt Pecot, fell through at the 11th hour last week. The firm’s prime services division includes a prime brokerage – the business of lending and providing other trading-related services to hedge funds.
Meanwhile an internal announcement on May 18 by BoA Merrill heralded the appointment of former Tremont Capital Management and Morgan Stanley man James Fallon as a director on the Asia-Pacific financing sales team. Fallon’s job will be to drive the business of lending to hedge fund clients in this region. source
This article was first published on Prime Brokerage Guide.com.
Tags: Prime Brokerage, prime broker, prime brokers, Prime Brokerage Firms Hiring, Open prime brokerage positions
Lower trading volumes have hurt many prime brokers. It has a led to a loss in talent to competitors and lower overall profits for 2008 and 2009. Below is a story about an Asian based prime brokerage firm shutting down. The article does not mention it but I believe part of this was the result of having a few of their relationship development managers cherry picked by larger prime brokerage firms:
The contraction of the Asian hedge fund industry is being felt by the region’s service providers. Prime broker Pali Holdings is closing its only office in Asia as its customers have cut back on their trading. source
Tags: Asian Prime Brokerage, Prime Brokerage Closing Down, Prime Brokerage Firms shutting down, prime broker, prime brokers, prime brokerage, trading, hedge fund trading, prime brokerage Firm
PrimeBrokerageGuide.com is the only website focused on providing educational content focused exclusively on the topic of prime brokerage. The website was started in early 2008 and now contains hundreds of industry articles and resources. Below please find a list of the top 20 most popular articles now posted to this niche website:
Tags: Prime Brokerage, prime broker, prime brokers, prime brokerage articles, prime bokerage information, information on prime brokerage industry, prime brokerage guide, guide to prime brokerage
PrimeBrokerageGuide.com is the only website focused on providing educational content focused exclusively on the topic of prime brokerage. The website was started in early 2008 and now contains hundreds of industry articles and resources. Below please find a list of the top 20 most popular articles now posted to this niche website:
Tags: Prime Brokerage, prime broker, prime brokers, prime brokerage articles, prime bokerage information, information on prime brokerage industry, prime brokerage guide, guide to prime brokerage
PrimeBrokerageGuide.com is the only website focused on providing educational content focused exclusively on the topic of prime brokerage. The website was started in early 2008 and now contains hundreds of industry articles and resources. If you are looking to work within the area of prime brokerage we would strongly recommend that you first read through 30-40 articles on this website.
Below please find a list of the top 20 most popular articles now posted to this niche website:
Tags: Prime Brokerage, prime broker, prime brokers, prime brokerage articles, prime bokerage information, information on prime brokerage industry, prime brokerage guide, guide to prime brokerage
While looking for a client document online I found a white paper on prime brokerage which discusses the use of multi prime brokerage firms by a single hedge fund.
This white paper claims that the benefits of adding a second prime broker include:
This full white paper may be read here. To contact prime brokerage firms who have helped support this website please see our service provider directory listing of them here: Prime Brokers
Tags: Adding A Second Prime Broker, Switching Prime Brokers, Prime Brokerage, prime Broker, Prime Brokers, Add a Prime Broker, Multiple Prime Brokers, prime broker changes
While looking for a client document online I found a white paper on prime brokerage which discusses the use of multi prime brokerage firms by a single hedge fund.
This white paper claims that the benefits of adding a second prime broker include:
This full white paper may be read here.
Tags: Adding A Second Prime Broker, Switching Prime Brokers, Prime Brokerage, prime Broker, Prime Brokers, Add a Prime Broker, Multiple Prime Brokers, prime broker changes
While looking for a white paper on prime brokerage I stumbled upon an example prime brokerage services contract. If you are conducting due diligence on prime brokers or about to sign a contract with one it may make sense to look at this example contract just to get a sense of what to expect or negotiate.
To view the example prime brokerage agreement please click here.
Tags: Prime Brokerage Agreement, Prime Brokerage Contract, prime brokerage, prime broker, prime brokers, Prime Brokerage Agreements, Prime Brokerage Contracts
The credit crisis and the subject of counter party risk is proving to be the final nail in the coffin for the hedge fund industry’s single prime brokerage model. Funds of all sizes now demand multiple custodial relationships.
The problem the high-cost-structure leading prime brokerage firms now face is that without the assurance of the captive single prime model the economics of servicing smaller funds no longer makes sense. This reality combined with the primes’ decreased risk tolerance means that we are seeing a mass exodus away from the top-tier primes. Anecdotal evidence suggests that these primes are now in the process of weeding out clients that manage less than $100 million or that do not generate annual revenues of at least $250,000. We are also witnessing primes becoming more selective about what type of funds they are willing to service. Funds whose strategies involve less liquid securities and/or high leverage are now finding the bar set much higher.
This retrenchment by the leading prime brokers raises the obvious questions – Who will fill the void and offer prime services to the lower end of the market? Who will provide the financing, stock loan, technology infrastructure etc. necessary for smaller funds to generate alpha?
Before we answer this question let’s take a moment to think about why this smaller hedge fund segment is so key to the future success of the industry. It is no secret that size kills alpha. Many successful funds follow a familiar arc. They gain attention (and funds) by earning outsized returns, as they grow in size their primary strategy reaches capacity and they experience a leveling off of returns. If they are not lucky enough to find another successful strategy, returns will continue to suffer, capital will begin to flow out and ultimately investment talent will go in search of new opportunities. This regeneration process is vital to the health of the industry and for many investors, it is the promise of catching a smaller fund during this growth phase that motivates them to invest.
Historically the group charged with picking up the crumbs left by the leading primes was a group known as the mini-primes. This term is rapidly becoming obsolete as the mini-primes now find themselves expanding their offerings to attract the funds that have been displaced. Two important differences remain: 1 – The mini’s still use the clearing services of their larger prime broker brethren, and 2 – more importantly, their cost-structures evolved in a way that allows them to offer prime services profitably at this lower end of the market. Interestingly we are also seeing a number of new entrants to this expanded segment of the prime brokerage industry. These are for the most part more traditional brokers who see an opportunity to increase the stickiness of their execution services, as well to develop new revenue streams, by building out a prime brokerage offering.
Only time will tell who will be successful in this greatly altered landscape of prime brokerage. The winners will be the firms that understand that the new economics of prime brokerage demand a new industry infrastructure. This prime infrastructure will rely heavily on cost-effective technologies that can offer aggregated multi-prime reporting, as well as real-time views of critical data such as P&L and Risk, right to the desktop of the hedge fund. This restructuring of the prime model will ensure the health of the industry by continuing to offer a relatively low barrier of entry to the all important small hedge fund segment.
Article contributed by Peter Curley of Nirvana Solutions
Tags: prime brokerage trends, prime brokerage news, prime brokerage, prime broker, prime brokers, California prime brokerage, new york prime brokerage, Dallas prime broker services
The credit crisis and the subject of counter party risk is proving to be the final nail in the coffin for the hedge fund industry’s single prime brokerage model. Funds of all sizes now demand multiple custodial relationships.
The problem the high-cost-structure leading prime brokerage firms now face is that without the assurance of the captive single prime model the economics of servicing smaller funds no longer makes sense. This reality combined with the primes’ decreased risk tolerance means that we are seeing a mass exodus away from the top-tier primes. Anecdotal evidence suggests that these primes are now in the process of weeding out clients that manage less than $100 million or that do not generate annual revenues of at least $250,000. We are also witnessing primes becoming more selective about what type of funds they are willing to service. Funds whose strategies involve less liquid securities and/or high leverage are now finding the bar set much higher.
This retrenchment by the leading prime brokers raises the obvious questions – Who will fill the void and offer prime services to the lower end of the market? Who will provide the financing, stock loan, technology infrastructure etc. necessary for smaller funds to generate alpha?
Before we answer this question let’s take a moment to think about why this smaller hedge fund segment is so key to the future success of the industry. It is no secret that size kills alpha. Many successful funds follow a familiar arc. They gain attention (and funds) by earning outsized returns, as they grow in size their primary strategy reaches capacity and they experience a leveling off of returns. If they are not lucky enough to find another successful strategy, returns will continue to suffer, capital will begin to flow out and ultimately investment talent will go in search of new opportunities. This regeneration process is vital to the health of the industry and for many investors, it is the promise of catching a smaller fund during this growth phase that motivates them to invest.
Historically the group charged with picking up the crumbs left by the leading primes was a group known as the mini-primes. This term is rapidly becoming obsolete as the mini-primes now find themselves expanding their offerings to attract the funds that have been displaced. Two important differences remain: 1 – The mini’s still use the clearing services of their larger prime broker brethren, and 2 – more importantly, their cost-structures evolved in a way that allows them to offer prime services profitably at this lower end of the market. Interestingly we are also seeing a number of new entrants to this expanded segment of the prime brokerage industry. These are for the most part more traditional brokers who see an opportunity to increase the stickiness of their execution services, as well to develop new revenue streams, by building out a prime brokerage offering.
Only time will tell who will be successful in this greatly altered landscape of prime brokerage. The winners will be the firms that understand that the new economics of prime brokerage demand a new industry infrastructure. This prime infrastructure will rely heavily on cost-effective technologies that can offer aggregated multi-prime reporting, as well as real-time views of critical data such as P&L and Risk, right to the desktop of the hedge fund. This restructuring of the prime model will ensure the health of the industry by continuing to offer a relatively low barrier of entry to the all important small hedge fund segment.
Article contributed by Peter Curley of Nirvana Solutions
Tags: prime brokerage trends, prime brokerage news, prime brokerage, prime broker, prime brokers, California prime brokerage, new york prime brokerage, Dallas prime broker services
The last 3 months of market activity has led to a mass re-distribution of power within the prime brokerage industry. Here is a quote from John Mack last week of Morgan Stanley speaking to this effect and of markets in 2009:
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Yet as Morgan Stanley and other companies move to reduce leverage, profit and revenues have plunged, forcing banks to cut back.
“Any time you take a business running at 30 times (leverage) and take it down to 16 to 17, that changes the nature of your business,” he said. “We have to look at that and resize it.”
As many as 30 percent of hedge funds are expected to go out of business in the next year due to market losses and redemptions, Mack said. As a result, revenues flowing through Morgan’s prime brokerage business will decline.
Morgan Stanley shares some of the blame for being overleveraged, he said, and has been shedding assets and raising capital to reduce its leverage ratio. Morgan Stanley now has less than $20 of assets for every dollar of equity, down from more than $30. Source
Tags:Prime Brokerage Industry, prime brokers industry, prime broker industry, leaders within prime brokerage, who leads the prime brokerage industry, prime brokers
According to www.indeed.com/salary Prime Brokerage Salaries in the United States are vary in different states. The average salary for entry level prime broker in the US is $49,000 as of recent. However in NY, MA, IL, CA the average salary for entry level prime brokers are much higher and these numbers relatively are $57K, $55K, $51K and $48K.
For junior prime brokers, the average salary in the US is $52,000. In NY, MA, IL and CA these numbers are $61K, $58K, $54K and $51K.
The average salary for senior executives is much higher than junior and entry level prime brokers since this number is $80,000 within the US. In the NY, MA, IL, CA relatively are $94K, $90K, $84K and $79K.
What these numbers seem not to include are the monthly commission checks which are cut to successive prime brokerage relationship managers. These individuals can make $5,000-100,000/month through trading commissions alone.
Tags: Prime Brokers, Salary, Senior, Junior, Average Salary, what salary do prime brokerage professionals make, how much do prime brokers earn, what salaries do prime brokers get, prime brokerage compensation, prime broker compensation levels
A good read titled “Battle of the Bulges” pointed out that competition for gaining prime brokerage market share is growing fiercer with more than $11 billion in expected hedge fund revenues in 2008, a 15% increase over 2006 (reported by TABB Group). The fight for market share is even more intense among the industry’s top players. For years the prime brokerage industry has been dominated by three firms—Goldman Sachs, Morgan Stanley and Bear, which collectively owned about two-thirds of the market. As of year-end 2006, the Lipper HedgeWorld prime brokerage league table ranked Morgan Stanley first (with 23% of the market and $153 billion in assets), followed by Bear (21%, $136 billion), Goldman (18%, $119 billion), UBS (7%, $47 billion) and Credit Suisse (4%, $25 billion), in terms of market share based on assets.
As Bear collapsed in March 2008, and Morgan Stanley and Goldman Sachs struggle to maintain their dominance in the industry, other major financial services firms are stepping up their prime brokerage efforts, including JPMorgan Chase, Deutsche Bank, UBS, Credit Suisse and BNP Paribas. JPMorgan Chased was only ranked eighth in the Lipper survey with just a 2.3% market share, now it is given a quick entry into prime brokerage as long as Bear’s hedge fund clients are successfully locked down. BNP Paribas bought Bank of America’s equity prime brokerage division that was ranked the sixth-largest in the country by assets at the end of 2006 by Lipper HedgeWorld, thus was instantly made one of the largest prime brokers in the U.S.
The recent turbulence in the prime brokerage industry also accelerated the trend of hedge funds moving away from replying on just one prime broker. Traditionally hedges funds are unwilling to switch prime brokers or increase the number of their prime brokers (TABB report). As Michael Guarasci, partner at hedge fund Indus Capital Partners said, “We have long-standing relationship with our prime brokers, so if a new company wants to come in and do business with us, it may not get anywhere because we’re pretty happy with our service. It’s not easy to switch prime brokers.” (full article). Now more and more hedge funds are adding prime brokers to limit counterparty risk since the fall of Bear (ref). This created considerable opportunity for new players to enter or existing players to take a bigger piece of the market share, as pointed out in an article by Merrill Lynch: “The multi-prime broker environment overcoming the challenges and reaping the benefits” (download the pdf).
Interested in learning more about prime brokerage. Please checkout the new website – http://PrimeBrokerageGuide.com.
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Permanent Link: Prime Brokerage Market Share
Tags: Prime Brokerage Market Share, Prime brokerage rankings, prime brokerage market share figures, prime brokerage, trading, prime broker, prime brokers
According to www.indeed.com/salary Prime Brokerage Salaries in the United States are vary in different states. The average salary for entry level prime broker in the US is $49,000 as of recent. However in NY, MA, IL, CA the average salary for entry level prime brokers are much higher and these numbers relatively are $57K, $55K, $51K and $48K.
For junior prime brokers, the average salary in the US is $52,000. In NY, MA, IL and CA these numbers are $61K, $58K, $54K and $51K.
The average salary for senior executives is much higher than junior and entry level prime brokers since this number is $80,000 within the US. In the NY, MA, IL, CA relatively are $94K, $90K, $84K and $79K.
What these numbers seem not to include are the monthly commission checks which are cut to successive prime brokerage relationship managers. These individuals can make $5,000-100,000/month through trading commissions alone.
Permanent Link: Salary Levels for Prime Brokers
http://primebrokerageguide.com/2008/09/prime-broker-salary-compensation-levels.html
Tags: Prime Brokers, Salary, Senior, Junior, Average Salary, what salary do prime brokerage professionals make, how much do prime brokers earn, what salaries do prime brokers get, prime brokerage compensation, prime broker compensation levels
The goal of PrimeBrokerageGuide.com is to help hedge fund managers and other interested parties become more knowledgeable about the prime brokerage business. Our goal is to help anyone interested in understanding long-term trends affecting prime brokerage.
Here are 10 of our most popular articles on prime brokerage:
Permanent Link: Understanding Prime Brokerage
Tags: Understanding Prime Brokers, How does prime brokerage work? Do hedge funds need prime brokers? How do prime brokers work with hedge fund managers?
Here are a collection of publicly available stories on BNP Paribas SA prime brokerage services:
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Resource #1: (11.16.08) BNP Paribas SA, France’s biggest bank, won prime brokerage business in Asia with hedge fund CQS (U.K.) LLP as it seeks to lure clients in the region from rivals.
The new contract with CQS, a London-based hedge fund manager that has an office in Hong Kong and oversees about $7.5 billion, adds to BNP Paribas’s existing relationships with major hedge funds in the region, according to Talbot Stark, global head of BNP Paribas hedge fund relationships. He declined to name other existing clients.
“We have prime brokerage relationships with three or four of the market leaders in Asia that are outperforming their peers and look to be longer-term survivors in the Asian hedge fund market,” Stark, 43, said in a telephone interview yesterday. “We’re in discussions with several other key players that are making decisions to change their prime brokerage providers and are seeking alternative providers that are established and committed to the region.”
Commercial banks such as BNP are seeking to win customers from established players in the hedge fund market after the collapse of Lehman Brothers Holdings Inc. and Bear Stearns Cos. rattled confidence in securities firms. Goldman Sachs Group Inc. and Morgan Stanley were ranked by a Westborough, Massachusetts- based Tabb Group LLC report in May as the two biggest prime brokers worldwide.
Prime brokerages offer hedge funds services such as clearing, custody, securities lending and financing for assets. They also introduce fund managers to investors. Source
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Resource #2: BNP Paribas SA, France’s biggest bank, said it got a “flood” of clients at its prime brokerage since Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15.
BNP Paribas expanded its services for hedge funds in June, when it bought Bank of America Corp.’s prime brokerage unit. The unit provides record-keeping, securities lending and secured financing to more than 500 hedge funds and has 320 employees, the company said.
“That acquisition now looks timely in these markets as people are in the middle of a flight to quality,” said Talbot Stark, global head of BNP Paribas hedge fund relationships, in an interview today. “Foremost on people’s minds is ensuring that wherever they decide to put assets, they will be secure.”
Lehman won’t return “billions” of frozen prime-brokerage assets “in the short term,” Stephen Pearson, a partner at PricewaterhouseCoopers, administrator for the Lehman bankruptcy, said yesterday. GLG Partners Inc., the $24 billion hedge fund that started as a unit of Lehman 13 years ago, this week said some “residual” trades with Lehman didn’t clear before it filed the biggest bankruptcy in history.
While Stark wouldn’t specify how much money hedge funds have moved to BNP Paribas, he said the company is now taking only 24 hours to sign complex prime brokerage agreements that used to take as long as three months to negotiate. Read more…
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Resource #3:
The FINANCIAL — BNP Paribas is pleased to announce it has completed the acquisition of Bank of America’s equity prime brokerage business.
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The equity prime brokerage business rovides a wide range of services to hedge funds and mutual funds. We believe it is a low risk, low capital consumption, service oriented business.
The deal, announced on June 10 of this year, brings more than 500 clients and over 300 employees to BNP Paribas Corporate and Investment Banking. The transaction involves the transfer of client relationships, employees and technology systems.
Yann Gerardin, Global Head of Equity and Commodity Derivatives, said: “The strategic fit of this acquisition is excellent. Combining the Bank of America prime brokerage business with our global platform and leading derivatives business creates a prime brokerage business of choice. It is an important advantage for clients to partner with a bank like BNP Paribas , with a AA+ credit rating and global reach”.
Todd Steinberg, Head of Equity and Commodity Derivatives for the Americas, said: “We are thrilled the deal has closed on schedule. Our goal was to move the business over seamlessly for clients and employees and we have achieved this. “
Permanent Link: BNP Paribas SA Prime Brokerage
Tags: BNP Paribas Prime Brokerage Services, Prime Broker BNP, What Prime Brokerage Services does BNP Parbias offer? Prime Broker BNP Paribas Paris France
More prime brokerage firms are adding on administration services to help attract and retain clients. I wasn’t sure how widespread of a trend this was but saw this mentioned within an article yesterday as noted below. I would be interested in discussing this further with hedge fund managers reading this article – if you have some insight – Richard@HedgeFundGroup.org.
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In recent years, the custodian banks that have acquired hedge fund administrators have sought to adjust client lists in favor of larger and more profitable hedge fund and fund of funds groups interested in a broader array of services. At the same time, prime brokers have recognized that providing administration services can help attract and retain clients and counter the shift among hedge fund managers towards multiple prime brokerage.
“It would be surprising if the hedge fund administration industry continues to support such a large number of providers, and there is now evidence that a renewed round of consolidation is in the offing,” says Dominic Hobson. “However, the appetite to sell may be offset as well as encouraged by the depressed prices available. In any event, the buyers are likely to be different from the banks which dominated the acquisition process in the early years of this century.” Read more…
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Permanent Link: Prime Brokerage & Hedge Fund Administration
Tags: Prime Brokerage and Hedge Fund Administration Services, Prime Broker offering administration services, administration services from prime brokerage firms, which prime brokerage firms offer hedge fund administration services
