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Customers cast a more critical eye on prime broking
Full report: The events of 2008, when prime brokerages yanked credit lines, spurred a rethink among hedge funds. But while the big brokerage houses Goldman Sachs and Morgan Stanley no longer enjoy the duopolistic status they once did as the prime brokers of choice, they are still at the top of the pile – Morgan Stanley and Credit Suisse are not far behind and Deutsche Bank brings up the rear
Evolving landscape pitches mini-primes against big names
While clients are beginning to use fewer brokers, the days of having a relationship with just one prime broker are over
Assets near record high but caution is watchword
Assets are near all time highs, but few hedge fund managers have the flexibility they once did – investors are more demanding and regulators more exacting of what they expect and what is permissible in the wake of the financial crisis.
Securities owners keen to lend again
The securities lending industry has bounced back strongly since the financial crisis, when the short selling facilitated by stock lending was widely pilloried, but revenues have continued to fall
Matchmaker teams beefed up by banks
Large banks have beefed up their capital introduction teams, an arm of prime broking that acts as matchmaker between hedge funds
Onshore hedge funds demand new services
The increasing use of Newcits means managers are no longer looking to prime brokers for leverage and shorting, but for help with structuring and distributing products to a wider client base
Partnership to be tested by alternatives directive
Custodians are to have greater responsibilities that will alter the prime broker relationship
Hedge fund borrowing levels remain subdued
Leverage levels remain subdued due to the higher cost of borrowing
