The Expanding Pie Of Prime Brokerage

Friedlander, Josh
March 2005
Investment Dealers' Digest;3/7/2005, Vol. 71 Issue 9, p26
Trade Publication
The article discusses prime brokerage firms. Wall Street firms have been rapidly building up their prime brokerage units, but lagging returns at hedge funds threaten this cash cow, especially for new entrants. One saving grace could be what appears to be an inevitable march of pension fund money into hedge funds. Another, somewhat counter-intuitively, is the increased regulation the industry is facing. The newest entrants into prime brokerage might best focus on niche areas such as compliance. In addition, in terms of multiproduct and trade execution capabilities, hedge funds are increasingly looking for brokerage firms to provide integration among their direct market access, order routing, algorithmic trading and program trading services.


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