The series of acquisitions that have taken place since Cowen Inc acquired Concept Capital Markets, LLC – which took place exactly two years ago – have been numerous and have led Cowen's prime services unit to become regarded as a genuine alternative to bulge-bracket prime brokers.
"We can meet the needs of managers, large and small, through the capabilities we've invested in," says Jack Seibald (pictured), Global Co-Head of Cowen Prime Services LLC, the prime services affiliate at Cowen. "When Concept Capital was acquired by Cowen, the principal reason we thought it would be beneficial was the common operating philosophy we shared that focused on helping our clients to outperform."
On the Cowen side the effort is anchored on the investment process with the firm's research capabilities, corporate access program, capital markets activities, and non-conflicted trade execution offering.
"On the prime services side, the effort is centred on providing investment managers with turn-key solutions designed to free our clients to focus on their core competency; investing. We offer a wide range of services including custody, electronic and high touch trade execution, outsourced trading, commission management, financing and stock loan, middle and back office support, pre- and post-trade compliance, capital introduction, new launch consulting, and portfolio and risk reporting."
Cowen has since acquired Conifer Securities, LLC, which dovetails nicely with the legacy Concept business. As Seibald explains: "Whereas we were much more focused on prime and an outsourced trading offering that was more recent, Conifer was very much the mirror image; much more focused on outsourced trading, less so on prime brokerage."
Subsequent to the Conifer acquisition, in March 2016 Cowen agreed to buy CRT Capital Group LLC's credit business, which included research, sales and trading in distressed, special situation, and emerging markets debt.
"Most recently, we've also been able to strengthen the securities financing business following Cowen's acquisition of Convergex. We are in the final stages of integrating Convergex into the Cowen family.
`Overall, we can now go out into the marketplace as the premier introducing prime broker in the US," remarks Seibald.
"Indeed, Cowen has a prime brokerage offering that is so broad and so deep that it puts it in a different category to other introducing brokers or what one might call `mini primes', and positions us as a more credible alternative to some of the bulge bracket firms. It has the ability to use its own balance sheet thanks to the Convergex acquisition, to facilitate securities financing and clear certain businesses internally.
"We're offering our clients the opportunity to participate in the rebates offered by those willing to pay for the privilege of borrowing hard-to-borrow securities (for short selling purposes). We've become an alternative to bulge-bracket prime brokers. We can meet the needs of managers, large and small, through the capabilities we've invested in.
"Both Cowen's existing prime brokerage clients and Convergex's clients will now benefit from a much larger pool of experienced professionals serving them. We have capital introduction teams spread much more broadly across the US (Texas, San Francisco, Connecticut and New York) so as to be closer with existing and prospective clients."
On winning this year's award, Seibald comments: "It's always gratifying for our team to earn accolades for the efforts we expend every day to service our clients. We are keenly aware, however, that our clients face new challenges all the time, and that we'll need to remain focused on developing and delivering solutions to meet their needs."
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