Nomura – Best Global Consultant in Business Strategy

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As Asia’s only full service prime broker, Nomura is well positioned to provide access to this region. However, with more than 65 per cent of its wholesale revenues generated outside Japan in 2013/14, Nomura has a comprehensive global offering. 

“Our capital introduction service provides clients with unparalleled access to Japanese institutional and retail investors via our dedicated local team. As well as extensive relationships with active asset allocators in Asia, the team runs highly-regarded flagship events across the region and globally,” says Ben Challice (pictured), Global Head of Prime Finance. 

“We can also leverage our strength in Japan and Asia by sourcing hard-to-access securities via our links with our Retail and Asset Management divisions. This provides market-leading stock lending availability, covering approximately 98 per cent of listed stocks in key Japanese markets.”

Market participants are expecting regional nuances with respect to the impact of regulation and in this regard, Nomura is ideally placed. It is not, stresses Challice, trying to be all things to all people. The firm’s main strengths are its domestic franchise in Japan, and unrivalled ability to deliver access to that market and the rest of Asia to global clients. 

“As the liquidity-based regulatory impact starts to manifest, banks will focus on their core strengths. We’ve stepped up our focus on funds trading in Japan, and Asia more generally, and that’s where I think Nomura’s consultancy and advisory expertise can be of value to our clients.”

There were two main areas of focus for the firm in 2014. One was supporting hedge funds trading in Japan but also looking to raise money there and the best way to go about that. The second was being more visible with regards to how regulation would likely affect the market.

“Financing is core to our platform so the focus was on liquidity regulation, in particular Basel III – Leverage Ratio, Liquidity Coverage Ratio and Net Stable Funding Ratio – and bilateral margining for OTC derivatives. We continue to have regular dialogue with our clients on potential changes to the cost of doing business and the likely dynamic between hedge funds and prime brokers,” explains Challice. 

From Nomura’s perspective, the primary focus for 2015 will be navigating the regulatory landscape in the lead up to implementation of the new rules, in addition to determining the right direction of the business for the coming years. 

“Unless you come up with a strategy for the future vision of the business, and adapt to regulation, you will fail. We will look to position our business accordingly and determine the suitable level of resources to allocate to each client based on specific return metrics,” confirms Challice. 

In April 2014, Nomura brought together its three existing businesses – a prime brokerage platform, a product-rich Delta 1 desk and a core equity financing business – into a fully integrated prime finance business. This followed the full integration of its equities and fixed income businesses into a global markets unit in 2013. 

The benefits of an integrated prime finance model, says Challice, are clear: “This has been fundamentally important to identify a) the assets we have as a bank and b) how best to optimise those assets. Equally important is our existing cross-asset relationship as part of global secured funding. I don’t think you can address any of these changes in the market without looking at your inventory in its entirety across asset classes,” says Challice.

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