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Celebrating its 150th year anniversary in 2014, Societe Generale took the decision in May 2014 to buy out Credit Agricole’s 50 per cent stake in Newedge, a leading provider of clearing and execution services in OTC and listed derivatives. This gave Societe Generale full ownership of the agency broker. 

“We have bolted on some significant businesses to become a fully functional global prime services business,” says James Shekerdemian (pictured), Global Head of Prime Brokerage Sales at Societe Generale Prime Services, formerly Newedge. “Alongside our clearing and custody, execution and financing platform of old, we now have the strength of Societe Generale’s client-facing equity finance business and substantial inventory from which Newedge clients can benefit. We are now the customer-facing, prime brokerage arm of the bank.”

Newedge has carved out a market-leading position in the CTA and global macro space. Now wholly integrated within Societe Generale, the Prime Services business is poised to extend its reach further into the equity space, supporting equity long/short, event-driven and market neutral strategies, alongside 40 ACT & UCITS products. 

“We’ve gone from a prime brokerage business, a cross-asset financing, and an execution services business, to one prime services business. We have OTC clearing, FX and fixed income prime brokerage and listed derivatives, and now we have an enhanced equity prime brokerage (cash & synthetic) too. With a consolidated reporting system and cross-margining across all our products, clients can benefit from simplicity, visibility and efficiency. 

“In the equity long/short space, much focus is placed upon supply. We now have deep inventory from which to source, and since becoming a fully-fledged business of Societe Generale’s Global Markets Business Line we’ve started to attract more equity long/short managers,” comments Shekerdemian. 

Newedge already had an electronic trading platform. Now it can tap in to the expertise of Societe Generale’s quantitative team and offer clients access to trading algorithms, transaction cost analysis tools etc, extending the suite of prime brokerage services. 

“In addition, we can leverage the bank’s research capabilities, which again we didn’t have at Newedge being an agency broker. Now we have global research, single stock research and macro research. Such a comprehensive prime services offering puts us firmly in the game,” says Shekerdemian. 

Another benefit is that everything is run off a single platform, without the pain of legacy that other banks face today where their equity prime brokerage teams are separate from their listed derivatives, fixed income, and FX prime brokerage teams. At Societe Generale, it is a single operating model. 

“Some of the tier one primes are looking at their business models, deciding what to do and how committed to be. Societe Generale has historically had a market leading equity finance business, but it never had a full-service prime brokerage business. At Newedge, the reverse was true. By joining forces, we are aligning the needs of the client with a carved out prime services business,” states Shekerdemian. 

What is also paramount is that the Newedge prime services business, perhaps helped in part by not having legacy issues, has the total backing of the Societe Generale Corporate and Investment Bank: a key attribute today given the uncertainty that Basel III is throwing up. 

‘Our message is clear: we have broadened our offering, we are committed to supporting clients across the spectrum of both Investors and Managers, and we are most definitely in growth mode,” concludes Shekerdemian. 

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