Earlier this year, Concept Capital Markets LLC was acquired by Cowen Group, Inc. ("Cowen"), a US investment bank and alternative investment manager with a heritage dating back to 1918. The transaction was completed 1st September and thanks to the significant financial resources that Cowen has at its disposal, the newly named 'Cowen Prime Services' division is now in a strong position to move quickly and build out its market share; with Europe a key focus of attention.
"We believe that there is a real opportunity for Cowen Prime Services to enter the European market and be successful," comments Mike Rosen (pictured), Cowen's Global Co-Head of Prime Brokerage. "There are a number of European bank-owned primes that are changing their approach and being required to downsize. That is creating an opportunity for an upper mid-tier firm like ours to provide prime brokerage services to European hedge fund managers."
In addition to financial resources, Cowen also brings significant intellectual resources to the table.
As Jack Seibald, who works alongside Rosen as Global Co-Head of Prime Brokerage, explains: "With respect to technology, we're developing enhanced portfolio reporting capabilities. We now have personnel in Belfast, Northern Ireland working with our team here in the US in both client service and technology solutions."
Seibald continues: "Cowen has an existing infrastructure in place for their traditional institutional business in a number of US markets as well as in London, neither of which we had at Concept Capital Markets. We are now in a position to build a more meaningful sales presence in certain US markets and in London; both as it relates to our prime services offering, as well as our outsourced trading solution.
"We aim to cover the entire trading day for major markets by having outsourced trading services in London, New York and San Francisco."
Currently, Cowen Prime Services has clearing relationships in place with Pershing, Merrill Lynch, Goldman Sachs, Merrill Lynch Professional and Chinese bank, ICBC. Seibald says that when analysing Europe it will look to establish "local clearing relationships" which will be an "important element of our business."
Cowen Prime Services intends to leverage Cowen's established FCA-registered London broker dealer to expedite its service offering. Looking ahead, Cowen Prime Services will aim to replicate as much of its US fully disclosed introducing brokerage model as will work within the European regulatory framework and provide outsourced trading solutions for European investment managers.
"We want to be able to offer European clients many of the same services we provide our US clients," says Rosen. "We believe we have a clear path to launching a portion of the services we will ultimately offer in the first quarter of 2016."
Rosen says that the goal, where appropriate, is to replicate the service offering of its US business in London. "Outsourcing trading services enables managers that can't afford an institutional-quality trading infrastructure to get precisely that. They get the benefit of an experienced buy-side trading desk that has relationships across a large number of brokerage firms, and is able to offer broader insights into stocks, sectors, and market colour than an individual trading solely within a fund management company."
The goal, concludes Seibald, is to bring "a high-touch consultative service to fund managers in Europe. We want to partner with our clients to help them achieve the best long-term results.
