Deutsche Bank’s Global Markets division is vast. It employs 6,000 professionals in 40 trading rooms across the globe, 18 of which are located in cities in Asia Pacific. Few prime brokers in the region can claim to have such a solid on the ground trading presence, giving hedge fund clients the speed of information and execution that’s critical for operational efficiency.
Its Hedge Fund Consulting Group has 13 members globally, four of whom are based in Asia. Over the past 24 months the Group has worked with over 60 managers in Asia involved in starting up, expanding or establishing new offices in the region.
As well as supporting clients in traditional equity capital markets, Deutsche Bank’s prime brokerage business has continued to build out its capabilities across FX and Fixed Income. Its Fixed Income Prime Brokerage (FIPB), which supports client clearing for OTC swaps, has established an active intermediation business with clients in Asia Pacific. Within the region FIPB offers derivatives intermediation to large macro-focused hedge funds.
Looking back at 2012, Angharad Fitzwilliams (pictured), Head of Hedge Fund Capital Group, Asia, at Deutsche Bank, says that 25 new hedge funds were launched “so we were very pleased with the growth of our business. In addition, we have created well in excess of USD1billion worth of RQFII ETFs facilitating client flow and market-making activity. We have been significantly expanding our market making of ETFs in the region over recent months.”
One important strategic market for Deutsche Bank’s prime brokerage is the Greater China space. It has made a big push into this market where it continues to see a lot of growth. “We believe we are now the largest prime broker in the Greater China space. We are also focusing on our capital introduction offering for Asian managers. We host a variety of specialist Asian manager events in Singapore, Hong Kong, London and Washington DC,” confirms Fitzwilliams.
Reflecting on the overall performance of Asian hedge fund managers in 2012, Fitzwilliams says it was a “mixed affair”, but notes that its China managers, on the whole, fared better than the rest. December 2012 was a good month for managers and ensured that most finished the year strongly, says Fitzwilliams, who continues:
“So far in 2013, we have seen strong performance continue and we are delighted to be able to report that this is pulling both European and US based investors back to the region. The new launch space is definitely quieter than in previous years and it is in the China space we are seeing most new launch activity. We are, however, on the whole very positive about 2013 and what it might hold.”
When asked whether Deutsche Bank was continuing to enhance its multi-asset class prime brokerage capabilities in response to Asian managers launching increasingly diverse trading strategies, Fitzwilliams says: “Yes. One of our differentiating factors is the margin relief we can offer our managers as we look across the capital structure. We are well positioned for funds that are expanding across multi-asset classes as this is how we built our business at Deutsche Bank originally.”
On winning the award, Fitzwilliams says: “We are extremely flattered about winning such a prestigious award. Thank you Hedgeweek and your readers.”