Thursday, 27 November 2014
Last updated 16 hours ago
Jul 25 2008 | 12:38pm ET
Has the credit crisis put an end to the heydays of prime brokerage?
A new report from Celent indicates it might have. Unlike the halcyon days when prime brokers would jump through hoops—and offer huge levels of leverage—to nab a hedge fund client and keep it happy, some are now “struggling to cope with the next stages of the credit crisis.”
In an industry where participants are “usually falling over each other to serve their profitable hedge fund clients, [prime brokers] are now playing hardball, sometimes without regard to the creditworthiness or track record of individual firms.”
The new stinginess “has already resulted in the collapse of some funds forced to liquidate assets,” Celent says, and may push hedge funds to seek capital from new sources.
In particular, the report says that hedge funds may go public or issue bonds to raise money.
“The lending squeeze is also likely to fuel the existing trend of larger hedge funds looking to reduce their financing ties with prime brokers by raising permanent capital,” Celent says.
Nov 4 2014 | 9:45am ET
Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…
Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...