Wednesday, 1 March 2017
Last updated 15 hours ago
Oct 23 2008 | 1:34pm ET
The numbers are in and there are few surprises as to which prime brokerages hedge funds prefer.
In Alpha Magazine’s annual awards for hedge fund service providers, Morgan Stanley took the number one spot (up from number two last year) for best prime broker for hedge funds with assets of over $1 billion, followed by Goldman Sachs & Co. in second place and UBS in third.
For the second year in a row, Merlin Securities ranked number one as the prime broker of choice for smaller hedge funds. Shoreline Trading Group came in second, making its debut on the list and edging out last year’s number one, Morgan Stanley, which came in third.
Shoreline’s ranking in the survey reflects how quickly the landscape of the prime brokerage industry is changing as nervous hedge funds jump ship from large investment banks to deal with smaller, more nimble multi-prime brokers.
“It was a great day yesterday because it reflected the confidence our clients have in us and proves our multi-prime brokerage model,” said Mike Murray, a partner at Shoreline. “Since Sept. 15 to last night, 23 new accounts have come to Shoreline. The Lehman bankruptcy was really the impetus for people to say, ‘Wait a minute, I need more than one prime broker.’”
Merlin, which like Shoreline has picked up new clients at a rapid clip following the collapse of Bear Stearns and the demise of Lehman Brothers, also believes the multi-prime model will take over as the preferred industry standard.
“Funds continue to migrate to Merlin for our aggregated multi-prime solutions and analytics,” said Ron Suber, a senior partner and head of global sales and marketing at Merlin. “October continues to be a record month, with 35 funds moving assets and balances to Merlin from other prime brokers.”