Tuesday, 1 December 2015
Last updated 17 hours ago
Sep 18 2008 | 9:16am ET
Like rats fleeing a sinking ship, hedge funds are yanking their prime brokerage accounts from Morgan Stanley before it becomes the next Wall Street casualty.
Hedge funds accounting for less than 10% of Morgan Stanley’s prime brokerage balances have withdrawn their money or informed the firm they plan to do so, Bloomberg News reports. The departures came amid market rumors that Morgan Stanley, which along with Goldman Sachs is the largest prime broker, would be the next Bear Stearns or Lehman Brothers, but before news broke that it may be trying to become the next Merrill Lynch.
Morgan Stanley shares have fallen more than 40% in recent days, and the firm is reportedly in talks with several banks, notably Wachovia Corp., about a merger.
The firm’s clients have apparently gone over to Citigroup, Credit Suisse Group, Deutsche Bank and JPMorgan Chase. A Morgan Stanley spokesman told Bloomberg that the firm’s prime brokerage assets are a minimal amount of its liquidity.
When Lehman filed for bankruptcy earlier this week, billions of dollars in prime brokerage assets were frozen for the “short term,” according to administrator PricewaterhouseCoopers.
Oct 21 2015 | 10:41am ET
One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…