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By James Williams – On 4 August 2014, the Wall Street Journal reported that Goldman Sachs had commenced culling its hedge fund client roster, offloading managers who simply weren’t generating enough return on equity. Fast forward to 7 December 2014. Reuters reported that Credit Suisse was considering scaling down its prime brokerage business, as Switzerland contemplates imposing a tier one capital ratio of 4 per cent on its banks by 2019, 1 per cent higher than the Basel III ratio.
This is the start of a process of serious soul searching for tier one primes as they weigh up the
Scotiabank is one of a stable of Canadian banks that have decided to enter the prime services space as regulation begins to shake up the established order. Basel III and other regulations are providing new entrants with similar opportunities that arose following the ‘08 financial crisis as managers adopted a multi-prime approach.
“Regulatory issues impacting the established set of banks are providing opportunities for new players. We are a recipient of this dislocation that is causing a lot of re-pricing conversations between managers and banks,” says John Stracquadanio (pictured), Head of Prime Services, Scotiabank.
“Tier one banks are dealing with
“In 2011, we identified that larger prime brokers were pulling back on smaller hedge funds. We saw our opportunity at that point,” states Paul Kelly (pictured), CEO of London-based Linear Investments Limited; an FCA-approved full service mini prime broker (Linear Mini Prime) providing full prime brokerage, custody and execution services to small and mid-sized hedge funds.
Back then, Linear Investments carved a niche supporting managers with USD5m or less in AuM. Aside from prime brokerage services, Linear also set up an FCA-approved regulatory umbrella for managers in a bid to keep operating costs to a minimum.
“It was a
Japan attracted significant international interest following the launch of Abenomics – how should global hedge fund managers assess Japan, and the rest of Asia, as a long-term source of capital?
The first two pillars of Abenomics, fiscal stimulus and monetary easing, gave a significant boost to the Japanese economy. The effect of the “third arrow” – structural reforms to stimulate growth – will be more gradual. However, since Abe’s re-election, there have been signs that Japan is embracing change and that it will impact all areas of the economy.
For example, the Government Pension Investment Fund of Japan (GPIF), the
Today’s evolving regulatory landscape is playing to the strengths of ABN AMRO Clearing, certainly with respect to EMIR and AIFMD. Over the last 35 years, ABN AMRO Clearing has built a nexus to global market infrastructures to provide execution services and post-trading facilities across most markets and products.
“We saw EMIR as an opportunity to expand our capacity. We are one of the largest clearers in the world and we’ve used this capacity to extend our clearing expertise into OTC derivatives such as IRS. It’s an opportunity for us to step in, demonstrate that we are a leading clearer, and
Celebrating its 150th year anniversary in 2014, Societe Generale took the decision in May 2014 to buy out Credit Agricole’s 50 per cent stake in Newedge, a leading provider of clearing and execution services in OTC and listed derivatives. This gave Societe Generale full ownership of the agency broker.
“We have bolted on some significant businesses to become a fully functional global prime services business,” says James Shekerdemian (pictured), Global Head of Prime Brokerage Sales at Societe Generale Prime Services, formerly Newedge. “Alongside our clearing and custody, execution and financing platform of old, we now have the strength of Societe
By James Williams (pictured) – A wise man adapts himself to circumstances as water shapes itself to the vessel that contains it. (Chinese Proverb)
It’s a well-known fact that adversity breeds innovation. As tough as it has become to do business in today’s financial markets, there are always opportunities to evolve, to re-assess one’s priorities, to build strength through consolidation.
One particular segment of the industry in which this is being borne out is prime brokerage. Primes of all shapes and sizes face a new reality today: the need to become both operational and balance sheet-efficient, and to broaden out
Man Group has completed the previously announced acquisition of Silvermine Capital Management, a Connecticut-based leveraged loan manager.
Silvermine had USD3.8 billion of funds under management across nine active collateralised loan obligation (CLO) structures as of 30 November 2014.
Mark Jones, co-CEO of Man GLG, says: “Silvermine enhances Man GLG’s existing credit business and provides increased expertise in the robust US credit markets, while benefitting from Man Group’s access to capital, global distribution platform and highly sophisticated infrastructure and framework. This transaction also strengthens Man Group’s commitment to expanding its US presence and complements an M&A strategy focused on identifying
Hedge funds lost 0.18% in December, according to the Barclay Hedge Fund Index compiled by BarclayHedge The Index was up 3.16% in 2014.
“Renewed concerns of a Greek exit from the European Union, plummeting oil prices, and swooning Russian financial markets took a toll on global equity and commodity markets as risk assets staged a broad decline,” says Sol Waksman, founder and president of BarclayHedge.
Overall, 8 of Barclay’s 18 hedge fund indices had losses in December. The Emerging Markets Index fell 2.34% in December, Distressed Securities were down 0.70%, Equity Short Bias lost 0.43%, and the Event Driven Index
Deutsche Börse Group announced today that it has received ‘in-principle’ regulatory clearance from the Monetary Authority of Singapore (MAS) to set up Eurex Clearing Asia, a clearing house based in Singapore.
The new clearing house of Deutsche Börse Group is an integral part of its new trading and clearing offering for investors during Asian trading hours and is expected to commence operations in 2016. Initially, Eurex Clearing Asia will clear selected European benchmark derivatives listed at Eurex Exchange which are traded during Asian market hours. The range of products cleared will subsequently be extended to include listed derivatives based on
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