FX Funds: Is the traditional prime broker model of accessing liquidity still relevant and what are the alternatives?

Our panel of experts discuss global FX markets in the context of wider market volatility and what the liquidity options are for those who want more from their liquidity provider. With a minimum of circa USD30 million in cash collateral now required to be posted to open a principal FX prime brokerage account, this is a difficult hurdle for a lot of smaller hedge funds to overcome. Is it really an efficient use of their capital, when there are plenty of other non-bank liquidity providers in today’s fragmented marketplace?

Topics for discussion: 

– General liquidity environment
– Difficulties that funds are facing and disadvantages of using a traditional PB
– Cost of capital, minimum ticket charges and liquidity access – the challenges of achieving economies of scale for smaller funds
– What impact has Covid had on liquidity?
– How should FX hedge funds best evaluate liquidity provision options in a fragmented marketplace?
– Pros and cons – and real-life manager examples – of using non-bank liquidity providers

Confirmed panellists:

– Adrian Marcu, Head of Investment Solutions, Belvoir Capital AG
– Philippe Bonnefoy, Founder, Eleuthera Capital AG
– Jonathan Brewer, Commercial Director, ISAM Capital Markets