Rehypothication RisksRehypothication Risks, Rights & CostsHere is a short article about the Rehypothication by prime brokerage firms, the definition of it, the risks of prime brokers using the strategy, the rights of hedge funds who loose access to their assets and what happens to the cost of prime brokerage services when hedge funds request for their assets not to be rehypothicated.Here is a short excerpt from the article:The dangers for hedge funds of having their assets rehypothecated became painfully clear last week: $22bn of the $40bn held by Lehman’s European prime brokerage had been rehypothecated. Hedge funds trying to reclaim the rehypothecated assets have found themselves in the queue of general creditors, likely to get back only a proportion of their money.Even those hedge funds which had ...

Prime Brokerage + AdministrationPrime Brokerage & Hedge Fund AdministrationMore 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.__________________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 ...

Asian Prime BrokerAsian Prime Broker Growth TrendHere is an interesting article about the growth of prime brokerage services in Asia. I didn't know that growth was so strong for these groups right now...Citigroup expects the amount of assets serviced by its Asia Pacific prime brokerage arm to grow by more than 30 percent annually over the next three to five years, as more global hedge funds set up shop in the region.Even with tumbling stock markets hammering Asia's hedge fund industry, many large international managers are doing more business in the region, drawn by its long-term potential, said Hannah Goodwin, head of Prime Finance, Asia Pacific for the U.S. banking giant."We're looking at a 30 to 50 percent growth every year," ...

Prime Brokerage Research Changes to the Prime Brokerage Industry FinAlternatives recently completed a great prime brokerage survey/report where they discussed how the highly-publicized hedge fund blowups, the Bear Stearnes collapse and the mortgage crisis have forced the prime brokerage industry to adapt more diligence in hedge funds’ risk exposure and leverage. Institutional investors are increasingly demanding hedge funds to have greater transparency, and hedge funds have passed much of this responsibility to prime brokers. Hedge funds are now employing multiple prime brokers and are more demanding of the services the brokers offer. Many of the larger hedge funds hoping to minimize exposure are moving fully-paid assets from prime brokers to banks. The larger hedge funds cut third-party risk by financing long positions exclusively through a ...