Prime Broker Market | Opportunities Challenges
Source: http://feedproxy.google.com/~r/richard-wilson-blog/~3/dpM15e_HfAk/prime-broker-market-opportunities.htmlPosted on Monday, February 2nd, 2009 | In Hedge Funds
Below is a short article on how the market share between prime brokers is changing. Some banks are gaining over $1B a quarter in new assets while others are losing market share to those banks which appear to be less risky to hedge fund managers who are trying to lower counter-party risk. Here is the article excerpt:
The collapse of Lehman Brothers last September was the flashpoint of a year that saw the prime brokerage world – along with that of its hedge fund clients – transformed by the ongoing credit crisis and grisly economic backdrop. But for those funds and brokers that come through the turbulence intact, the new landscape offers a broad range of opportunities for the coming years, according to Nick Roe, the London-based head of prime finance at Citi.
While the hedge fund assets that were locked up in London after Lehman Brothers International (Europe) went into administration garnered headlines for a while, Roe argues that just as important was the spotlight turned on rehypothecation – the use by prime brokers of hedge fund assets as collateral for the borrowing they need to provide funding to those clients.
‘I believe the regulations regarding rehypothecation will change, with prime brokers forced into much more transparency,’ he says. ‘But it won’t go away, because most hedge funds couldn’t cope with the changed economic conditions if prime brokers weren’t able to make use of some of their assets to deliver the required levels of funding.’ source
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 About Richard C. Wilson (http://richard-wilson.blogspot.com/)
Richard Wilson is a hedge fund consultant and head of the Hedge Fund Group (HFG). Richard writes articles on the hedge fund industry on a daily basis. Most of these articles are straight forward educational pieces on hedge fund strategies, terms & definition, trends, book reviews and interviews. Richard has written two books, The Hedge Fund Blog Book and Rainmaker. The Hedge Fund Blog Book is a collection of my blog posts downloadble for free at HedgeFundsBook.com. Rainmaker is a negotiation and sales book for investment professionals available in electronic, paperback and hardback form at Rainmaker.ws. Richard's articles have been picked up and used by Reuters, Fox Business News, HedgeCo, Hedge Fund Daily, Nielsons, Wealth Management Exchange, Investopedia.com and a couple dozen niche financial and investment focused blogs and email newsletters, most recently StraightStocks.com Richard loves networking and truly believes that if you freely give away your knowledge and lessons you have learned in business others will come to your aide when you need a favor or would like to form a business partnership. Email Richard at Richard@RichardCWilson.com |
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