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Prime Brokerage 2018

Fri, 19/01/2018 - 13:15

As hedge fund managers put prime brokers under increasing pressure to be more transparent and open, this Hedgeweek Special Report examines the various prime brokerage models currently available to hedge funds, and details the latest services on offer.

The 'Prime Brokerage 2018' special report comprises 8 separate articles listed below, these can be read individually or as a sequence.
James Williams, Hedgeweek

Revenue options grow as regulation unfolds

Fri, 19/01/2018 - 13:24

Prime brokerage divisions are focused on the task at hand of maximising their revenues at a time when the largest bank-owned operators face stiff competition from specialised, boutique primes, keen to offer clients a more inclusive, high-touch service.  »

Jack Seibald, Cowen

Building a strong repertoire

Fri, 19/01/2018 - 13:29

In the current market environment, hedge fund allocators face a bit of a Catch 22. With markets continuing to move north – the S&P 500 was up 19.8% during 2017 (as of 28 December) – there is a strong argument to invest in long-only passive products. Even if investors, worried about a market correction, increase their exposure to hedge funds, how do they determine the extent to which a manager’s performance is alpha-driven as opposed to beta-driven? »

Sean Capstick, GPP

Revenues are at all-time highs and growing rapidly

Fri, 19/01/2018 - 13:34

Increasingly, boutique prime brokers are gaining favour among both emerging and established hedge fund managers as they seek to develop higher-touch, more meaningful relationships. This is understandable against a backdrop of uncertainty in recent years, with bank-owned primes culling non-profitable hedge funds as they deal with the pressure of managing their balance sheets more effectively under Basel III.  »

Jerry Lees, Linear Investments

A comprehensive MiFID II solution for new managers

Fri, 19/01/2018 - 13:40

Starting up a hedge fund is a challenging endeavour. Hiring staff, implementing all the necessary risk controls and regulations as well as running the organisation profitably, is far from easy. Many new hedge funds fail every year. However, starting a successful new hedge fund is still possible if one takes a pragmatic approach by outsourcing as many of the operational parameters as possible, including trading and execution.  »

James Williams, Hedgeweek

Price transparency can deepen hedge fund relationships

Fri, 19/01/2018 - 13:45

One of the clearest manifestations of technology innovation is the way in which it is enhancing transparency in all aspects of the investment funds industry, from front-office portfolio analytics and trading cost analysis, middle-office investor reporting, to back-office compliance and accounting.  »

Phillip Chapple, Monterone Partners

Transparency can help reinforce relationships

Fri, 19/01/2018 - 13:50

Hedge fund managers are putting their prime brokers under continued pressure to be more transparent and open with respect to how they set their revenue targets and how they determine their costs for stock lending, commission rates, and margin finance.  »

James Alexander, Invast Global

Inside the mind of a Prime of Prime

Fri, 19/01/2018 - 13:55

Interview with James Alexander, Commercial Officer at Invast Global  »

Steve Sanders, Interactive Brokers

The power of execution

Fri, 19/01/2018 - 14:01

Being a fully automated online electronic brokerage firm, Interactive Brokers has found itself in an enviable position of adapting to new regulations such as MiFID II relatively seamlessly. As it already had a lot of the IT technology in place to demonstrate best execution, IB has not needed to go through a significant overhaul nor, importantly, has it needed to hire a lot of extra staff, thereby increasing its fixed costs. »

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