Cowen Prime Services - Best Global Prime Broker
2015 was a big year for Concept Capital Markets, LLC having entered into an agreement to be acquired by Cowen Group, a leading growth investment bank and alternative investment firm with a heritage dating back to 1918. The transaction was completed 1 September 2015 and thanks to the significant financial and intellectual resources that Cowen has at its disposal, the newly named `Cowen Prime Services' division is now well positioned, and resourced, to further expand its prime brokerage offering.
"The acquisition is a validation of Concept Capital's capabilities in the marketplace and a realisation that with the firms' shared view with respect to market philosophy and client services, the opportunity is significant to grow the offering globally. We have been entrusted to use the Cowen name to grow the business and are very excited at the opportunities ahead," says Mike Rosen, Cowen's Global Co-Head of Prime Brokerage.
Indeed, with so much turmoil in the industry caused by the impact of Basel III regulation, bank-owned primes are jettisoning hedge funds. This is playing straight into the hands of Cowen Prime Services, with its ability to use Cowen's balance sheet and other capital markets capabilities helping to attract and service ever larger hedge funds.
"We had a very good fourth quarter onboarding new clients and we still see significant activity in the early part of 2016. Things slowed up a touch towards the end of January given the extent of market volatility, but the markets have settled down recently and now it's very much business as usual," says Rosen.
One of Cowen Prime Services' strengths as an introducing broker is the number of long-term, stable clearing relationships it has in place (five in total). This enables the firm to facilitate most hedge fund strategies in the market. "There are select strategies that we may prefer to avoid. That said, if there is a sound business reason for taking on a strategy and the Investment Manager is well pedigreed, we are extremely entrepreneurial and flexible in our views as to what we will onboard. When we onboard a new client, we want to be confident that it will be successful. We are extremely thoughtful in our due diligence in order to maintain the integrity of our platform and avoid jeopardising any of the relationships we have spent years cultivating," confirms Rosen.
With respect to business expansion opportunities, Cowen Prime Services has its sights firmly set on Europe with Rosen confirming that the first component will be to offer outsourced trading services to hedge funds in London, which is scheduled to go live this month.
"We will use our registered broker/dealer, Cowen International Limited, for our outsourced trading solution, taking advantage of the infrastructure Cowen has in place in London. We will then follow that up with our prime brokerage offering," says Rosen. "We are one of the few firms that has a full-service offering in the introducing brokerage space where we've got a significant and recognised equity research team and solid capital markets capabilities; this definitely helps to set us apart from most of our competitors.
"From a philosophical perspective, we view our client relationships very much as partnerships where we truly try to help each manager to survive and thrive in a competitive marketplace."