h1 style="text-align: center;"bNew Prime Brokerage Model/b/h1h2 style="text-align: center;"bspan class="Apple-style-span" style="color: rgb(102, 0, 0);"New Prime Brokerage Model Emerging/span/b/h2br /a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://4.bp.blogspot.com/_wM_OZdOMR_Y/SUvGhHYSIaI/AAAAAAAACrA/bkbv9SI9Bmo/s1600-h/Prime-Brokerage-Trends.jpg"img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 134px; height: 200px;" src="http://4.bp.blogspot.com/_wM_OZdOMR_Y/SUvGhHYSIaI/AAAAAAAACrA/bkbv9SI9Bmo/s200/Prime-Brokerage-Trends.jpg" alt="New Prime Brokerage Model Emerging" title="New Prime Brokerage Model Emerging" id="BLOGGER_PHOTO_ID_5281533260240920994" border="0" //aThe 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.br /br /The problem the high-cost-structure leading a href="http://primebrokerageguide.com"prime brokerage/a firms now face is that without the assurance of the captive single prime model the economics of servicing smaller funds no longer make 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 ...

h1 style="text-align: center;"bTop 3 Trendsbr //b/h1h2 style="text-align: center;"bTop 3 Prime Brokerage Trends/b/h2br /a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://www.mauronewmedia.com/images/ued/main-business-objectives.jpg"img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 228px; height: 162px;" src="http://www.mauronewmedia.com/images/ued/main-business-objectives.jpg" alt="" border="0" //aOver the last two years the mainstream media’s and general public’s interest in prime brokerage has rapidly grown. This is due to a number of factors including the struggle and failure many investment banks offering prime brokerage services including a alt="Lehman Prime Broker" href="http://primebrokerageguide.com/2008/05/lehman-prime-broker.html" title="Lehman Prime Broker"Lehman Brothers/a, mergers within the industry and widespread failures and redemption notices of hedge funds themselves.br /br /The top three trends affecting the prime brokerage industry right now are multi-prime brokerage relationships, limiting capital introduction services, and prime brokers acting as business partners to hedge fund managers.br /br /Multi-prime brokerage relationships used to be used by $5B+ a href="http://richard-wilson.blogspot.com/2008/03/hedge-funds.html"hedge funds/a whose large institutional clients demanded the practice as a risk ...

Asian Hedge FundsAsian Fund Leverage & Prime Brokerage(http://hedgefundblogger.com) It seems that many Asian-based hedge funds have dodged a few bullets by not being tied as closely to Bear or Lehman... that combined with traditionally using less leverage than some other funds might have helped a few Asian hedge funds weather this storm. By a few I mean very few - recent data suggests that Asian funds are down more than their peers over the last few months. Below is an excerpt on how some Asian funds have dodged the prime brokerage woes of US and UK based groups:________________________ASIAN hedge funds are relatively shielded from the distress that their counterparts in developed markets are weathering, thanks to their use of 'far less' leverage, said UBS head of prime services (Asia Pacific) David Gray.'Our clients have been ...

Prime Brokerage SingaporeArticle on Prime Brokerage in Singapore

Here is a recent post from our associated PrimeBrokerageGuide.com site:

When visitors arrive at Singapore's Changi Airport, they get both an immigration card and an application form for opening a hedge fund.

This was one of the jokes making the rounds in 2007. The fact is that hedge funds in Singapore were growing fast since 2006. According to an article dated Feb 2007 from eFinancialCareers, "prime brokers are in hiring mode" - Barclays Capital, Citigroup, Lehman Brothers, Morgan Stanley and UBS all hired for their Singapore prime brokerage operations in 2006.

By Nov 2007, Singapore serves as prime broking regional headquarters for Credit Suisse

...

Prime Brokerage Market ShareA Brief Overview of Industry Market ShareA 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

...

by Energy and Capital

“Most hedge funds were deeply invested in energy and commodities in the first half of the year, because that’s the only part of the market that was making any money while oil made an historic run. Bloomberg estimates that assets linked to commodity indexes exploded 200-fold from $13 billion at the end of 2003 to $260 billion by March of this year.

The massive selloff that began in July—which has now whacked roughly 25% off the entire energy and commodity complex, absolutely killed many of the funds—as they had to unwind highly leveraged investments at the worst possible time.

The amount of leverage can’t be known, since private funds aren’t required to disclose it. We do know that via a process called Joint Bank Office (JBO), hedge funds can act as though they are prime brokers, and leverage as much as 200-to-1. Under such tension, even …

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 ...