Wells Just Weeks Away From Launching Self-Cleared Prime

Jun 11 2014 | 8:49am ET

Two years after buying its way into the hedge fund services business, Wells Fargo is set to expand its prime brokerage.

The bank plans to launch a self-cleared prime brokerage business by the end of the month, Risk reports. Wells has been working on the service since its 2012 acquisition of Merlin Securities, an introducing broker that offered hedge funds access to Goldman Sachs’ and JPMorgan Chase’s prime-brokerage services.

The new business will initially support only U.S. assets. Wells prime-brokerage chief Eamon McCooey said that it will debut in “a couple of weeks”—pending regulatory approval—and will expand “over the next five years to accommodate more clients and strategies.”

“We’re not weighed down with legacy derivatives positions or a large prime brokerage franchise that we’re trying to turn on its head due to regulatory constraints,” McCooey told Risk. “We’re a well-capitalized bank and one of the safest counterparties in the world. So we definitely see an opportunity to be a financing provider to hedge funds given our strong and liquid balance sheet under the new regulatory framework.”


In Depth

Q&A: Star Mountain's Brett Hickey On Investing In 'The Growth Engine Of America'

Sep 22 2017 | 5:06pm ET

Lower middle-market companies form the economic fabric of the nation, but they can...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

 

From the current issue of

Business Insider has been reporting on the unusual trading activity of a mystery trader who placed a profitable short equity bet to the tune of $21 million on the Aug. 10 move in the CBOE Volatility Index (VIX).