prime broker 2019 - s11202.pcdn.co€¦ · hfm prime broker 2019 ew managers have a lot to think...

Prime Broker 2019Special Report

FEATURING BCS Global Markets // BNY Mellon | Pershing // Cowen Prime Services // GPP Prime Brokerage // JonesTrading // Maybank Kim Eng // Sova Capital

TAILORED PRIME BROKERAGE OFFERING:BECAUSE EACH CLIENT IS UNIQUE

LONDON One London Wall London, EC2Y 5EA T +44 (0) 20 7832 6500

NEW YORK 41 Madison Avenue 20th Floor New York, NY 10010 T +1 646 891 2110

EDITORIAL REPORT EDITOR Ross Law T: +44 (0)207 832 6535 [email protected]

HFMWEEK EDITOR Matt Smith T: +44 (0)207 832 6627 [email protected]

HEAD OF PRODUCTION Claudia Honerjager

SUB-EDITORS Alice Burton, Charlotte Sayers, Luke Tuchscherer

COMMERCIAL ASSOCIATE PUBLISHER Lucy Churchill T: +44 (0)20 7832 6615 [email protected]

HEAD OF NORTH AMERICA Tara Nolan +1 (646) 335 3438 [email protected]

SENIOR PUBLISHING ACCOUNT MANAGER David Butroid T: +44 (0)207 832 6613 [email protected]

PUBLISHING ACCOUNT MANAGERS Victoria Bennis T: +44 (0)207 832 6615 [email protected]

Sigita Gravere T: +44 (0)207 832 6631 [email protected]

THE MEMBERSHIP TEAM +44 (0)20 7832 6511 [email protected]

CIRCULATION MANAGER Fay Oborne T: +44 (0)20 7832 6524 [email protected]

CEO Charlie Kerr

HFMWeek is published weekly by Pageant Media Ltd ISSN 1748-5894

Printed by The Manson Group

© 2019 all rights reserved. No part of this publication may be reproduced or used without the prior permission from the publisher

HFM PRIME BROKER 2019

ontributors to this report assess the current trends and develop-

ments in the prime brokerage space.

The growth of outsourced trading, due in no small part to the

advance of technology and its increasing acceptance among institutional

investors, has been a notable trend.

This, along with advising the emerging manager on selecting the most

appropriate prime service solutions, comprise a common thread through-

out this report.

The acceptability of outsourcing now also means that some have moved

away from the more traditional PB players and can look to smaller outfits

to offer more bespoke prime services and solutions than was the case in the

past.

It means that prime service providers can now function as legitimate buy-

side solutions rather than retooled sell-side players.

Overall this report should give our readers much to think about regarding

their trading set-ups and the providers they enlist.

Ross Law

Report editor

Prime trends

C

HFM.GLOBAL 03

Emerging managers: ready for the journey Andrew Rae-Moore of GPP Group provides guidance that will set emerging managers off on the right course

Sound advice on choosing your prime broker Leonard White and Andrew Gee of Maybank discuss how funds should be leveraging their relationships with their prime brokers

The adviser approach: does comfort equal opportunity? Mark Aldoroty of BNY Mellon | Pershing considers how advisers can be made to feel more comfortable with adopting an alternative strategy

A genuine buy-side solution Jack Seibald and Bobby Croswell of

05

07

10

12

Cowens define the tenets of a good outsourced trading solution

An unrivalled global offering Tim Bevan of BCS Prime Brokerage highlights the development of the firm’s products and their differentiator in the prime space

Prime services – focusing on today’s challenges Gary Clifford-Newman and Roger Balch of Sova Capital explain their hedge fund prime services’ suite and consider how their offering stands out in the crowded prime services space

The outsourced trading firm Andy Volz of JonesTrading explains the firm’s recent observations on outsourcing and discusses some of the key issues influencing the prime brokerage space

15

17

20

CONTENTS

Award Winning Delivery 2015, 2016 & 2017

Consistency is just oneof our strengths.

We recognise that the needs of smaller funds are no different from their largercounterparts. So, we built a business to deliver a unique, bespoke service,

especially for their needs.

It says something about our high standards, that in our first year we were alreadyrecognised by HFM to be the best, with Best awards won almost every year since.

We thank our clients and our partners for their support and their continuous feedback, that helps us ensure our services exceed their expectations.

And for our future clients, you can expect consistency of delivery in bespoke investment services to meet your requirements.

2015: Best Prime Broker – Boutique2016: Best Boutique Prime Broker – Client Services

2017: Best Prime Broker – Boutique

Please contact us for a conversation.

ASIA: +65 6536 2000, [email protected] I EUROPE: +44 20 7332 0235, [email protected]

Disclaimer: The materials, information and functions provided in this advertisement shall not under any circumstances be considered as an offer or solicitation to sell, buy, give, take, issue, allot or transfer, or as the giving of any advice in respect of shares, stocks, bonds, notes, interests, unit trusts, mutual funds or other securities, investments, loans, advances, credits or deposits in any jurisdiction. Maybank Kim Eng Securities Pte. Ltd. Co. Regn. No. 197201256N

The best fit for your business.

Prime

ASIA SERVICESHFM

AWARDSWINNER


ew managers have a lot to think about when launching a hedge fund. Their primary concerns

are likely to be how they get inves-tors on board and establish a busi-ness that is built for future success.

Choosing a prime broker may not be top of a manager’s priority list, but we can help with more than most managers realise. We have ex-perience of launches from across a broad client base and can help pre-vent managers from making the mis-takes we’ve seen before. As emerg-ing managers start their journey, we can help them to ensure alignment with investors and advise on the things they must consider when raising money.

The demands of different inves-tors can vary significantly and new managers can’t cater to all of those needs. At the same time, they need a clear vision of where they are going so things don’t sour further down the road. So how should a new man-ager prepare?

Know your audienceAt the start, managers must be able to articulate their strategy clearly and identify the investor bases, and regions, where their strategy is go-ing to have most appeal. Most hedge fund investors have restrictions on what they can invest in, such as the size of the fund, the percentage of the fund their investment can account for, or the length of track record they need to see from the manager.

Managers must be aligned with their target investors from the be-ginning, including on fee structures. Certain investors will require more generous economic terms in order to invest at the earliest stages of a fund’s development, with those de-mands changing as the fund grows

over time and raises more assets. New funds must think about how much they are willing to yield to some of these demands, whether through fee discounts, guaranteed capacity or revenue shares. Man-agers should not simply opt for an arrangement that will get money through the door; it may end up being too expensive and disadvan-tageous for the business in the long term.

Do your homeworkThe reality for emerging managers who are raising money is that inves-tors will always try to make compar-isons with similar strategies. They want to frame you in the context of the competition to establish what makes you unique. Managers can get ahead of the game by research-ing their competition, identifying the comparison points investors are likely to make and defining how their strategy is different.

Managers can access an abun-dance of data, commentary and

N

Emerging managers: ready for the journeyAndrew Rae-Moore of GPP Group provides guidance that will set

emerging managers off on the right course

Andrew Rae-MooreGPP Group

Andrew Rae-Moore joined the prime brokerage team at GPP in early 2019. Previously he was at Morgan Stanley where he spent more than 18 years on the prime brokerage desk of its institutional equities division, rising to COO of client coverage. Before that he worked as an analyst on the bank’s international equities desk in New York.

HFM.GLOBAL 05


insight from hedge fund journals, news sites and service providers, such as prime brokers, fund admins and lawyers. This will help them to understand what an investor is look-ing for in terms of the expected vola-tility of returns, the ticket sizes they will be able to sign off and the types of investors that are therefore suita-ble for their fund.

Managers must put the right structure in place from the start. Of-ten a manager will be able to launch a fund because an individual insti-tution has decided to support them with a cornerstone investment. Managers can’t be all things to all people and so defining your intend-ed clients, often based on your first investors, is essential. This can tell managers whether they need, for example, a Ucits structure to house a liquid strategy aimed at European institutions, or a Cayman vehicle for a more or less liquid strategy target-ing US high-net-worth individuals.

Much of a manager’s early success in raising money will depend on their track record. The ideal scenario is for a manager to present an audited track record from previous experi-ence of running the same strategy. Investors will be sceptical of any new and unproven strategies, which are unlikely to attract money at launch. In these circumstances, managers should consider a business model where they first run a small amount of money to establish a documented track record.

Building for scale As managers grow, they will obvi-ously consider what changes they

need to make to facilitate the devel-opment of their business. However, many of these arrangements need to be made at the start.

From an infrastructure perspec-tive managers should try to tap into, at the early stages, service providers that give them a variable cost base. Managers should avoid large com-mitments that won’t be economi-cally viable until a certain asset level is achieved – outsourced solutions can circumvent fixed costs that burn through start-up capital.

Over time this model should be in-verted to insource more services, for example paying for a portfolio man-agement system licence, bringing legal work in house to general coun-sel, or replacing an external com-pliance consultant with your own compliance team. Once a manager reaches a certain scale fixed costs become a worthwhile one-time in-vestment that will reap substantial benefits as asset grow.

Managers must get things right at the start and pave the way for success by ensuring their systems and service providers are scalable. Choosing an OMS or a fund ad-ministrator that can’t grow with a business and needs to be changed is unsettling for investors, who will question your judgement. There

are some elements where you can afford to be more flexible, such as using a serviced office until you have the headcount to require your own facilities. If you make changes in oth-er areas, investors will may be less forgiving.

How we can helpWhile new prime brokers can be en-gaged at any stage of your growth, the best will be there for the whole journey. They will grow with you and advise you on how to evolve your business at each stage of your success.

Emerging managers choose to partner with GPP as we offer a full service, multi-product solution spanning prime brokerage, execu-tion, custody, clearing and settle-ment, from one central team that can resolve issues without delay. We also know the service providers that managers will need to help them develop their business models from launch through to managing many hundreds of millions.

At the earliest stages we can ad-vise managers on the viability of their book, including stock lending and financing rates, and help them to help them to optimise margin. We can tell them which parts of their strategy will be harder to trade and provide an experienced view on the costs they will face and where they are most likely to be successful.

Preparation is key to the journey. We can provide managers with the advice and support that they need to set up and grow a business that can adapt for and embrace success in the long-term.

From an infrastructure perspective managers should try to tap into, at the early stages, service providers that give them a variable cost base

06 HFM.GLOBAL


Q Can you give a brief introduc-

tion of Maybank?

Leonard White (LW): Maybank Group is a leading provider of fi-nancial services in Asia and has been an essential part of the Asean landscape for almost sixty years. Maybank Kim Eng (Maybank) is the investment banking and brokerage division of Maybank Group. We cur-rently operate across 18 countries including all 10 Asean countries, Hong Kong, the UK and the US.

At a time when many prime bro-kers are scaling back their services with smaller funds, Maybank has made a commitment to support these clients. We are able to offer our clients access to a wide range of markets and services under

terms best suited to the econom-ics of their business. This enables us to work with a broad range of funds with widely different levels of assets under management. The

technology platform was designed to be flexible so we can offer the same high levels of service without discriminating against smaller or start-up funds.

Q What key changes have you

seen over the last twelve

months in the prime brokerage

space?

Andrew Gee (AG): It is a well-worn trope that changes in the regula-tory environment such as Basel III led to a marked shift in a lot of banks’ attitudes towards the use of their balance sheets, with obvi-ous knock-on effects to their prime brokerage businesses.

This was true in 2014 when Maybank started offering its prime

Leonard WhiteMaybank

Leonard White joined Maybank in 2014 and is head of European prime brokerage. He has worked within financial services in London for nearly 30 years covering institutional equities sales and trading, portfolio trading and leveraged products. He has managed teams and businesses at Daiwa Securities, Man Group and Cantor Fitzgerald – he was part of a team that was instrumental in the growth of CFDs in the UK while at GNI (latterly Man Group) and has worked in the prime segment for nearly two decades.

Andrew GeeMaybank

Andrew Gee is head of sales, prime brokerage, Europe. He joined Maybank in early 2015 from IG Group where he managed institutional sales in the UK. Prior to IG, he worked on the CFD desk at MF Global/Man Financial, managing institutional and prime clients for over five years. Gee has over 15 years’ experience in the financial services industry and leveraged products.

Sound advice on choosing your prime brokerLeonard White and Andrew Gee of Maybank discuss how funds should be

leveraging their relationships with their prime brokers

HFM.GLOBAL 07


brokerage services but we are still seeing the effects in 2019. In the past two months alone, we have seen two major European banks drastically pare down their prime brokerage and equity financing of-ferings to funds.

LW: As a result of these changes and the success of companies like Maybank, the last 12 months have seen an increase in boutique or mini prime brokers entering the space. While this is good in the sense of offering managers more choice, I don’t believe it is sustainable and we will likely see some consoli-dation in the market. Managers should bear this in mind when pick-ing counterparties, ensuring they are well capitalised with strong credit ratings and a track record.

Q What should funds be looking

for in their prime broker?

AG: Whether you’re an awkward teenager or a college jock, the good news is there is probably a prime broker out there for you! All prime brokers are stronger in certain are-as than others so managers should make sure they shop around.

Managers should also ensure the prime broker understands their strategy in detail. For example, it may be possible to establish a re-lationship with a tier-one bank, but what happens after the first year when the bank’s revenue hurdles are not being met? Fund managers consistently report changing their prime broker as their biggest oper-ational headache.

Ensuring the prime broker is flexible enough to support differ-ent account structures and types of entities is also important. As a manager, especially in the early days, investors can have varying ideas of how they want to invest in your strategies. For this reason, we open fund structures, managed

also be taken into consideration when choosing a prime broker. Using Maybank as an example, while our prime brokerage plat-form is global, our roots are in Asean. Maybank consequently offers research coverage on the majority of Asian exchanges.

• Banking services: If the prime broker is part of a banking group, they may be able to of-fer you other banking services by virtue of your relationship with them. We have been able to offer prime brokerage clients bank accounts in Singapore as well as in London. We have also seen interest in our bank’s abil-ity to finance large equity and commodity deals, as well as of-fering structured products to clients.

• Trade execution: It is a good idea for managers to discuss execution requirements with their prime broker. It may be that little to no assistance is re-quired by the manager, but if it is needed, the broker may be able to help without the manager re-sorting to employing a trading team or outsourcing the trad-ing. Some purely online brokers are great if all that a manager needs is electronic access, but if a manager needs to speak to anyone to discuss the operation of the account, then this can be more challenging.

• Local insight: Managers should consider where they are target-ing their fund as this can have a huge effect on the best places and means to setting up fund structures.

• Capital introduction: This can take many forms from formal to informal arrangements. At the very least, prime brokers should have a network of capital allo-cators they can introduce man-agers to.

Q In one sentence, can you tell

fund managers why they

should speak to Maybank?

LW: Maybank occupies a unique space with an offering created to be as flexible and inclusive as a mini or boutique prime brokerage while standing as part of a substantial banking group.

accounts and face family offices directly.

LW: At Maybank, we are clear on our offering with strong support for new and emerging manag-ers. Consequently, we are happy to consult in the initial stages of a fund setup and develop fee struc-tures that are very supportive in the early – and often most difficult – years of a fund’s operation.

Time to market should also be considered. With management and performance fees under continued pressure, the ability to earn them as soon as possible helps! We aim to open a prime brokerage account within two weeks of receiving a fully completed application. In tier- one banks or brokers without ded-icated onboarding teams, this pro-cess can take months.

Q How else can a fund leverage

their relationship with their

prime broker?

AG: When discussing leverage with a prime broker, the conversation usually centres around how much of it the broker can give a man-ager for their trading. However, managers should also be thinking about how else they can leverage their relationship with their broker. There are a number of ways a prime broker may be able to help:• Their network: Putting a prime

broker in place is often one of the first pieces of the jigsaw when setting up a fund. A good prime broker will have an exten-sive network of other service providers that they have previ-ously worked with and can make introductions to. The PB will of-ten have a good idea of the ser-vice providers’ areas of exper-tise which can save the manager a lot of time and energy.

• Research: If a fund needs spe-cialist coverage, this should

About Maybank Group

Maybank Kim Eng is the investment banking and brokerage division of Maybank Group.Issuer Credit Rating: A- (Standard & Poor’s Q2 2019)ASEAN’s fourth largest bank by assets ($199bn FY 2018)Over 45,000 employeesImportant legal information can be found at www.maybank-ke.com/prime/TnC.html

08 HFM.GLOBAL

JonesTrading has been a trusted, high touch execution partner for institutional money managers and hedge funds for over 40 years. Through our network of over 135 registered representatives we source liquidity from the worlds largest institutions and hedge funds in addition to virtually every exchange and dark pool. We are able to secure advantageous prices across the greatest number of markets in a timely manner, without revealing client intent. We remain neutral and clients remain anonymous, minimizing market impact and opportunity costs.

Cost and time effeective trading due to our relationship-based modelNetwork of more tthan 1,500 institutions and hedge fundsAccess pent-up liquidity and secure trades that might not havve otherwise occurrredUnderstanding of client intent, strategy, and styleUnderstanding of market conditions in any security, at any timmeAccess to US, European, and Asian securitiesTrader assigned too each account

#1 ranked broker for Outsourced Trading by HedgeWeek (2018)#1 ranked broker for Outsourced Trading by HFM Week (2017)


ccording to recent headlines, hedge funds had their best first quarter in 13 years to

start 2019 with sharp capital gains. While this might indicate that in-vestors are seeking out alternative strategies in greater numbers and are more comfortable with the risk/reward profile, there is still an opportunity for alternative as-set managers to communicate the benefits of adopting an alternative investment strategy to advisers who are still tentative about jump-ing in.

At a recent conference hosted by our firm, a quick show of hands from advisers indicated that more than three quarters of the attend-ees were already including alterna-tives in their allocation strategies.

So how does the industry get the message out to those advisers who have not yet ventured into the al-ternatives realm? Getting into the mind of the adviser to account for the perceived roadblocks is one way hedge fund managers and other alternative asset managers can tap into this potential investor pool.

Process before performanceAs a best practice suggested to advisers, investment industry

experts agree that developing a tight process around alternative investment selection rises to the top of the priority list. For some, that means partnering with an out-side firm to help with operational due diligence so they can focus on overall asset allocation. For others, it means rolling up their sleeves to do their own research – sometimes that’s as basic as studying the land-ing page of a hedge fund’s website. Whatever the specific process, an advisory firm that can set aside re-sources to prioritise their own ed-ucation will be able to commit to adopting an alternative strategy more efficiently.

Where can a hedge fund help with education? Some suggest-ed areas include providing trans-parency, helping the adviser

AMark AldorotyBNY Mellon | Pershing

Mark Aldoroty is a managing director for BNY Mellon | Pershing. He leads prime services and Pershing’s collateral funding and trading. Prior to this role, Aldoroty led the prime services sales and relationship management teams. His prime brokerage career spans more than 25 years. He previously held senior roles at Citi, Deutsche Bank and Goldman Sachs. Aldoroty earned a Bachelor of Science degree in Computer Science from Brooklyn College.

The adviser approach: does comfort equal opportunity?Mark Aldoroty of BNY Mellon | Pershing considers how advisers can be made to feel more

comfortable with adopting an alternative strategy

10 HFM.GLOBAL


understand the complexities of a strategy, and explaining how risks are measured and controlled. An adviser who truly understands a strategy will face fewer obstacles in convincing their colleagues, their risk decision-makers and eventual-ly their clients about the benefits of investing in alternatives. For some hedge funds, that could mean more technical training for their mar-keting professionals so the actual portfolio managers can stay off the road and focus on what they do best. Additionally, marketing pro-fessionals should be able to speak to risk management processes to communicate the details of their risk mitigation tools to advisers and their investors.

Once an advisory firm has a solid process in place, the conversation

about fees and performance can continue with confidence. And po-tentially with less focus on chas-ing short-term performance be-cause the long-term vision is more digestible.

Fees: the other F-word One point of differentiation that a hedge fund can leverage in the adviser space is flexibility around fees. If a fund is lacking in pedigree, performance history or having an anchor investor, being creative around fee structure could help in keeping the attention of advisers and their clients. Whether the ap-petite is for double-digit returns or a defensive strategy, alternative investment managers should con-sider that an adviser’s expectation on fees could be the result of ex-pectations set from prior experi-ences or no experience at all.

If an adviser can show that the fee-versus-reward ratio aligns with the profile of the hedge fund – whether that is a start-up, an es-tablished fund or an outperform-er – properly correlated fees can make alternatives a more palata-ble investment to their investors.

DifferentiationEven the most alternative-investment-savvy advisers can fail to see what differentiates one hedge fund from another. Outside of the household names of the largest funds or those with activ-ist reputations, how a hedge fund tells their individual story can help an adviser connect and commit. If there isn’t a track record of sol-id performance, shift the focus to

leadership, transparency, poten-tial, integrity of the team or flex-ibility to move with the markets. The traits that resonate within a hedge fund could also ring true in the culture of an advisory firm.

From the adviser’s point of view, whether it’s articulating their own unique value proposition or ad-dressing how to stand out among different generations of investors, chances are an advisory firm is putting resources towards differ-entiating themselves in their own space. BNY Mellon’s Pershing un-derstands this challenge and we work with our adviser clients to help them refine their differentia-tion strategies.

Ongoing opportunityAdvisers should consistently be reminded that alternatives are an evolving asset class, each cycle bringing about new ideas and more efficiency. At our recent confer-ence, one fund-of-fund manager shared feedback he heard from an adviser who claimed his clients didn’t want to bother getting to know more about alternatives. How can that reaction be avoided? By reminding the adviser communi-ty that they are in the driver’s seat in helping their clients make the move towards alternatives. Keep-ing an open mind and being recep-tive to information and education could map the path to a true com-mitment for an adviser to adopt an alternative investment strategy. Hedge fund managers who recog-nise this can benefit regardless of market conditions and fluctuations in risk/reward appetite.

About BNY Mellon | Pershing

BNY Mellon’s Pershing and its affiliates provide a comprehensive network of global financial business solutions to advisers, broker-dealers, family offices, hedge fund and ’40 Act fund managers, registered investment advisor firms and wealth managers. Many of the world’s most sophisticated and successful financial services firms rely on Pershing for clearing and custody; investment, wealth and retirement solutions; technology and enterprise data man-agement; trading services; prime brokerage and business consulting. Pershing helps clients improve profitability and drive growth, create capacity and efficiency, attract and retain tal-ent, and manage risk and regulation. With a network of offices worldwide, Pershing provides business-to-business solutions to clients representing approximately seven million investor accounts globally. Pershing LLC (member of Finra, NYSE, SIPC) is a BNY Mellon company. Addi-tional information is available on pershing.com, or follow us on Twitter @Pershing.

HFM.GLOBAL 11


Q Why is outsourced trading

gaining so much traction in re-

cent times?

Bobby Croswell (BC): A lot of it is likely related to costs. It’s no secret that fund managers have experi-enced fee compression in recent years, so it should come as no sur-prise that PMs and their COOs are exploring ways in which to cut costs, and perhaps redirect resources to ar-eas that can have a more direct im-pact on portfolio performance, such as adding an analyst. Outsourced trading is a simple way to turn a fixed cost into a variable one. At the same time, it allows fund managers to leverage a trading team with experi-ence across asset classes and geog-raphies, as well as a complete trad-ing and support infrastructure, all of which would be difficult and costly to replicate in house. The acceler-ating traction of outsourced trad-ing is also a function of the rapidly growing acceptance of this service among institutional investors. Per-haps because of this, we’re not only seeing enquiries for this solution from emerging managers starting funds, but also large existing multi-billion dollar hedge funds and more traditional, long-only investment managers.

Jack Seibald (JS): Outsourcing, in general, continues to gain favour in the financial services industry, as is clear from the rapid growth seen with firms providing COO, CFO and CCO services, middle and back office solutions, technology hosting and support services, and others. As it

relates to the trading function, very simply, it’s nearly impossible for any buy-side entity to put in place and manage a solution with the global reach, infrastructure, and experi-enced traders such as our firm has – a team of 25 traders, many of whom previously worked at prominent hedge funds and have average ten-ures ranging from 15-20 years, and another 25-30 people on the opera-tional and technology side support-ing them.

There is also the additional matter related to portfolio managers being tasked with generating returns, and increasingly it’s become apparent in the marketplace that being profi-cient at running a portfolio doesn’t necessarily translate into having the talent to run a business. And running an investment management busi-ness encompasses both. The oppor-tunity to reduce the stress involved, and the attention required, to prop-erly run a business – i.e. people – the more portfolio managers have the opportunity to remain focused on what they ought to be doing.

Q Why wasn’t outsourcing as

accepted in the past?

JS: I think it’s a combination of things. First, credible outsourced solutions weren’t readily available for a long period of time. That started to change following the financial cri-sis and the massive downsizing that took place at many of the largest financial institutions. Many people in varying functions at large insti-tutions found themselves suddenly unemployed and with few, if any, op-portunities available at other banks, brokerages or investment funds, many talented people reinvent-ed themselves and developed new businesses. Additionally, allocators also appear to have had a change of heart and in recent years have come to more readily accept outsourced solutions, in part because of the cal-ibre of the offerings, but also based on the notion that an extra set of in-dependent eyes on a portfolio serves the governance requirements.

BC: I also think it has a lot to do with technology and how it’s pro-gressed. A lot of the functions were once manual in nature and therefore more appropriately internal to the organisations. Now that tech has proliferated, and capabilities have expanded, efficiencies can be gained within organisations, and outsourc-ing non-investment related func-tions have become a meaningful opportunity for asset management firms. An example of this is pre-trade compliance on order management systems, which probably weren’t available a decade ago.

A genuine buy-side solutionJack Seibald and Bobby Croswell of Cowen define the tenets of a

good outsourced trading solution

Jack SeibaldCowen

Jack Seibald is global co-head of prime brokerage and outsourced trading, Cowen. He was a co-founder and managing member of Concept Capital Markets until its ac-quisition by Cowen Group. in September 2015. He has been affiliated with the firm and its predecessors since 1995, and has extensive experience in prime brokerage, investment management, and research dating back to 1983.

Bobby CroswellCowen

Bobby Croswell is managing director and senior member of Cowen’s outsourced trading team who leads business development. Prior to joining Cowen, Croswell was a partner and managing director at BTIG in the outsourced trading division for nearly 12 years, where he played key roles on the trading desk and in developing the firm’s client relationships. Croswell began his career as a research analyst at StreetAccount.

12 HFM.GLOBAL


Q What’s involved in establish-

ing a credible OT offering?

BC: To start, I think you have to have the requisite infrastructure. That means employing the right organi-sational and compliance set up, the right buy-side order management solution, the proper operational support functionality, and of course, the right mix of traders that have a background of working with PMs on a day-to-day basis as well as multi- asset class talents. Without all of these, I think it’s not unreasona-ble to assume that you are likely to struggle.

JS: I also think that it helps if one starts with a basic philosophy and set of principles. Where we come from, and this is perhaps driven by our backgrounds as HF managers ourselves, the notion is simply that the outsourced trading service ought to be a true buy-side solution. This means not just repurposing a sell-side system to function as a buy-side offering, or just employing sell-side traders. At Cowen, we use buy-side OMS infrastructures to support our clients, and also make those avail-able to them, including the support required to manage them. This solu-tion facilitates a variety of elements, but perhaps most important among those is the ability to direct orders to the executing brokers on the street in the client’s name, not ours. Our goal is not to interpose ourselves be-tween client and executing broker, but rather to be a facilitator.

It’s important from our perspec-tive that the executing brokers know for whom they’re executing the trade when they get the order, and it’s equally important that the cli-ents know which broker is executing the trade at the time they give the order. This level of transparency pro-vided to both parties involved in the transaction is critically important from our perspective.

BC: To add to that, I think you need to have multi-asset class traders and a global footprint. Our traders are lo-cated across time zones in the US as well as in London and Hong Kong, so we can offer 24/6 trading and serve as the eyes and ears for fund trading on a global basis. And for managers trading globally and need to operate

we avoid these conflicts, adds a lot of comfort as we aim to develop this trust.

Q What are your key differentia-

tors in the PB marketplace?

BC: When you boil it all down, I think our outsourced trading solution is differentiated in the marketplace by its transparency and the level of operational support it includes. It all stems from our philosophy that the solution should be a true buy-side one, and then it’s all about manag-ing the ingredients that go into mak-ing it a credible offering.

This encompasses the trading team that includes seasoned per-sonnel, most of whom have buy-side experience, with multi-asset capabilities, the buy-side systems we employ and provide to our cli-ents, our setup in a separate broker- dealer, the complete nature of our service that goes well beyond just trade execution and includes com-mission budgeting and manage-ment, pre-trade compliance, OMS/EMS integration and support, trade-break resolution, portfolio reconcili-ation and reporting, and risk report-ing. And when thinking about the breadth of our solution, fund man-agers will quickly realise how much further their commission dollars go. This is particularly so as they gain ac-cess to our firm’s institutional servic-es as a client, including for example research, corporate access events, and capital introduction.

It’s a very all-encompassing list of functions that we perform – many of which are not done by others in the outsourced trading business.

Our goal is not to interpose ourselves between the client and

the executing broker, but rather to be a facilitator

in markets other than their own while they sleep, we can serve in a bespoke manner as the client’s solu-tion in that time zone.

JS: Another element that we believe is critically important to the long-term sustainability of an outsourced trading business, is that it doesn’t only appear to be, but is, a service provided in a compliant and diligent manner that respects the integrity of clients’ information. We operate our outsourced trading business in a separate broker dealer from Cowen’s institutional business – we’re not just on different trading desks, we’re in a totally different broker-dealer.

We think this is important be-cause, ultimately, though our firm operates an agency-only model, there’s always that opportunity for a conflict to arise if the outsourced trader is sitting right next to an in-stitutional trader, which is often the case at other firms. We avoid this potential conflict because we sit in a separate entity from the institution-al trading desk. From a credibility perspective, this is relevant because what we’re asking clients to do in this outsourced trading relationship, is to trust us with a very important element of their business. Having the ability to comfortably say that

HFM.GLOBAL 13


QHow has your client offering

developed in recent times?

ABCS Global Markets has been the leading prime broker glob-

ally in terms of access to Russia for a number of years, crucially support-ing access to Moscow Exchange, but also global venues where oth-er Russia-related instruments are traded. Servicing a number of the largest and most sophisticated hedge funds and proprietary trad-ing firms globally has taught us that the combination of low-touch, technology-driven trading solu-tions combined with a high-touch and professional support product is the way to win and retain business.

It was a natural decision, there-fore, to select a synthetic prime bro-kerage model to further distribute our core Russia product and utilise the inherent efficiency and flexi-bility of the swap-based approach

to build out a multi-asset, global platform.

Having seen high demand for ex-posure to the Russian equity mar-ket, we now have a dollarised RTS Index Future Swap that provides exposure to the Index, where com-mission, Initial Margin and Variation Margin is calculated and settled in US dollars, avoiding the need for lo-cal currency hedging, settlement or conversion. This, coupled with our existing dollarised equity coverage on the Russian exchange, provides the ability to trade a variety of strat-egies, plus access the out of hours

liquidity available in the MOEX de-rivatives market ‘evening session’ which covers US market hours.

Our earlier introduction of dollar-ised Russian Commodity and Single Stock Futures means our platform now offers access to the complete suite of equities and futures across the exchange, giving BCS the most advanced synthetic Russian offering globally to match our long standing and unrivalled physical product.

We continue to develop our Syn-thetic Prime platform in terms of asset-class coverage & product services, focusing initially on core developed US and European mar-kets. With our affiliate BCS Amer-icas trading desk and associated NYSE floor operation, we can pro-vide impartial advice on US equities execution strategy and work with clients to best optimise/monetise their flow.

An unrivalled global offeringTim Bevan of BCS Prime Brokerage highlights the development of the firm’s

products and their differentiator in the prime space

Tim BevanBCS

Tim Bevan is global head of prime brokerage and CEO of BCS UK. He spent the formative part of his career at the London Stock Exchange, where he managed the ETF and structured products platform and latterly was involved in the launch of Russian derivatives on Turquoise Derivatives (then EDX). Prior to joining BCS, Bevan was at Otkritie Securities Limited where he developed and built up the DMA/prime brokerage platform.

HFM.GLOBAL 15


QWhat are the firm’s aims for

2019 and beyond? What are

you focusing on in particular?

AWe see 2019 through 2020 as key years to build out our

platform, looking closely at Asia, emerging markets and other frontier markets where we understand there to be increased demand. Our belief is that focusing on strategy, as op-posed to geography or asset class, is the key to building a successful prime business. In this way, you are able to provide a sub-set of poten-tial clients the full range of tools required to generate alpha before focusing on the next phase of build out. This must include developing the right margin rules to maximise capital efficiency and include appro-priate hedging tools when it comes to ancillary FX, interest and credit risk exposures.

Working with our existing clients and speaking to an increasing num-ber of additional prospects, China continues to be a focus. Having es-tablished a strategic relationship with a key local institution (a core feature of our international build out strategy) we are enthusiastic about the distribution opportunities on our platform, satisfying demand from existing clients and what we know to be a growing interest in the hedge fund space.

Technology continues to drive the industry (as does regulation) -- no surprises there. But there is also fragmentation, which presents opportunities. The question then is how best to leverage and realise these opportunities when we see a lot of new entrants coming into the prime space, apparently all chasing the same opportunity. To our minds, that means playing to your strengths and that involves a level of honesty as to where your weaknesses are. BCS, being a relatively recent new entrant into the synthetic space, has invested into a state-of-the-art swap engine and reporting suite. At the same time, we don’t profess to have all encompassing trading/fi-nancing strength or expertise in all corners of the globe.

Given our presence in the US and our growth through our UK hub, we continue to broaden our reach and will further assess demand in ad-ditional Asian markets throughout

providers who offer simply an exten-sion of the services provided by their prime partners and dependent upon their infrastructure.

Unlike most incumbents in the ‘mini-prime’ space, we are totally in-dependent from our prime partners. Rather than being dependent on infrastructure for client reporting, risk management and other client- focused services supporting our business, we are autonomous and can react quickly to client demand for improved bespoke provision of information and data, to their sup-port operations and administrators.

Our client portal, providing online access to reports and other busi-ness support tools, will continue to attract our focus in the coming months. We have plans to further develop the portal to allow portfolio analysis to our clients, and addition-al data and information services to their administrators. We see this as an important feature of our platform as the industry continues to become more tightly regulated, and demand for bespoke reporting and account-ing increases.

How markets and the business of prime brokerage develops over the next five or 10 years is almost impossible to predict, so the need for flexibility and reactivity are the key components to a successful business model. That plus a com-mitment to a standard of service consummate with the institutional marketplace.

Our belief is that focusing on strategy, as opposed to geography or asset class, is the key to building a successful prime business

2019/2020. Our ability to ‘switch on’ coverage of markets and new asset classes according to demand, demonstrates the success in our strategy of investing the time and effort required to establish robust and scalable foundations to our product platform, and we are now seeing the benefits in this approach. It is this scalability, quickly being able to adopt and work with strong local presences through a single, fully integrated platform which we believe is the key to success. Hav-ing a robust and unified core with a strong global network of partners, whereby we are able to up-scale or down-scale without significant mar-ginal time/cost, gives us the kind of reactive and flexible platform that today’s market requires.

QWhere do you see the oppor-

tunities in the prime broker

space currently?

AWe see ourselves as the first ‘boutique prime’ service provid-

er in the market, filling the gap be-tween the major primes servicing the tier-one funds and the mini-prime

16 HFM.GLOBAL


Q Sova Capital were not espe-

cially well-known within the

prime service’s space until several

years ago – why is this and how are

you any different?

A Many will not know this, but Sova Capital has actually been

operating for over 10 years, having first established itself in London in 2007. To this day, we continue to be a leading service provider to some of the world’s most prominent banks, brokers, funds and market making firms – providing electronic and high-touch execution capabil-ities, prime financing, stock-loan, repo and custody services to clients trading equities, fixed income and futures products in the emerging market space.

However, in the past few years we began carefully developing a prod-uct suite aimed at providing small- and medium-sized managers with access to developed markets. The reason we did this is that we realised our product suite naturally fulfilled the requirements of such managers, and their prospect investors, which managers within the prime services landscape were otherwise strug-gling to find; as within the UK, most ‘mini-primes’ follow a so-called ‘ag-gregation model’, which means they utilise an ultimately superior tier 1 prime provider relationship as their sole source of providing prime ser-vices. One of the underlying reasons for this is mini-primes tend to be quite ‘light’ in terms of their balance sheets, relative to the larger banks. Consequently, a key issue arises – whereby the deposits a manager

may be placing can often equal or exceed their prime provider’s UK bal-ance sheet. In our view this creates a level of increased counterparty risk for the managers and their investors as the managers struggle to identi-fy a provider with the right suite of products but one who is also suita-ble in terms of counterparty quality.

Outside of the larger prime pro-viders (banks), Sova Capital has a natural solution to such counterpar-ty concerns as we offer a multi-asset suite of prime services backed by an independent, significant UK balance sheet ($386.7m equity share capital, as of 31 December 2018).

As a result, we bridge the gap between the mini-primes and the tier I banks in terms of counterparty quality and product offering. We’re now really reaping the benefits of this, in part because now perhaps more than ever, investors want to know where the fund managers are holding their assets and how they’re being held. This is when the prime product being offered becomes important.

Q Arguably the UK prime ser-

vices space is already highly

competitive and arguably over-

serviced – why did you decide to en-

ter the market now?

A In terms of product, we built ours ‘from the ground up’ with a

clear rationale to not just follow the same model used by others; we either do it better, or we don’t do it at all.

When speaking to fund man-agers and their COOs, we found that there were a number of areas in which there has been room for improvement.

Upon selecting their prime ser-vices provider and beginning to re-view their agreements, aside from balance sheet concerns, managers have identified unexpected com-plexities relating to parent compa-nies and guarantees away from the prime provider’s UK entity or that certain services are being provided from different entities altogether. Historically this has created a bal-ance sheet versus quality of product challenge that managers have had to carefully balance based on their current and future requirements.

In terms of futures and options, managers struggle to find a suitable provider within a prime relationship. A number of managers have advised that they would ideally like to ac-cess flexible OTC derivatives desks of global banks for various reasons in-cluding portfolio, FX or interest rate hedging. Managers would prefer this under an ISDA but they cannot gain access to the banks who can provide such a service due to their lack of suf-ficient notional volumes traded.

Prime services – focusing on today’s challenges Gary Clifford-Newman and Roger Balch of Sova Capital explain

their hedge fund prime services’ suite and consider how their

offering stands out in the crowded prime services space

Gary Clifford-NewmanSova Capital

Gary Clifford-Newman is vice president, Prime Services Sales. He joined Sova Capital in 2018 and is focused on delivering prime services for Investment Managers, Hedge Funds and Managed Accounts covering Equities, Fixed Income, Futures and Options Execution, Prime and Custody solutions.

Roger BalchSova Capital

Roger Balch is director, head of Prime Services Sales. Balch leads the Prime Services Sales team at Sova Capital, where he has built a significant institutional client base over the past six years. Prior to this, he began his career at the London Stock Exchange Group where he worked in the Equity & Derivatives Secondary Markets Department managing the Exchange’s relationship with their largest trading clients.

HFM.GLOBAL 17


As a last example, from a financ-ing perspective most mini-primes rely on an aggregation model, mere-ly utilising their tier 1 provider re-lationships with limited stock-loan capabilities outside of these. This is not necessarily a strong solution be-cause the clients ultimately get less of an offering than if they were with a tier 1 provider but they pay more spread for the access.

We believe we have an operating model that addresses each of these issues and this is why clients have selected Sova Capital during this dif-ficult market environment.

Q How would you categorise the

types of clients interacting

with Sova Capital?

A Broadly speaking, clients who deal with Sova Capital can be

placed into two categories. Firstly, there are those who choose us as their sole services provider, and this is commonly the case for those with managed accounts holding circa $5m and above or for those clients who have a Cayman fund structure and whom have AuM ranges from $20m to $100m and above. Howev-er, secondly we have also found that those who have chosen Sova Capital have done so because their size war-rants the need for a secondary prime provider to an already established tier I prime relationship, but they are conscious of costs and potentially

size that they would like. This fur-ther justifies the need for ensuring not only an auditable track record but one that it is supported by a sus-tainable business model.

From what we have seen this year, there are two key points that new managers should focus their attention on, at the earliest possi-ble stage, so as not to jeopardise a potential seed investor coming on board. Firstly, ensuring they have a full business plan in place with suffi-cient provisions to cover all running costs for the first year, if not longer. Secondly, to be prepared to conduct enhanced due diligence on all po-tential service providers. The selec-tion process is key across all aspects of a strategy being launched and it is important to select the right ser-vice provider that suits a manager’s needs and provides the necessary assurances and security expected of their investors. Therefore strong due diligence considerations should be given to selecting the most suit-able legal adviser, regulatory um-brella, administrator, EMS/OMS and prime services provider. Ultimately, one size may not fit all but equally a square peg in a round hole doesn’t work either. We have seen a number of new managers select the servic-es of an interim COO to assist them in this process, some of whom have strong selection criteria models to assist clients in this process.

We bridge the gap between the mini-primes and the tier 1 banks in terms of both counterparty quality and product offering

high monthly minimums. As argua-bly the only legitimate alternative outside of the banks for such clients, they may open an account with Sova Capital – depositing 10%-20% of their total AuM – in such cases cli-ents tend to be much larger in terms of AuM size, and we are very open to these conversations. Consequently, we have a very broad exposure to many clients and understand their key challenges and issues.

Q From your conversations,

what challenges do you see

your clients and prospects facing

and what advice would you give to

those looking to launch in the sec-

ond half of 2019 or early 2020?

A For the emerging managers, it’s clear that progression this year

has proven difficult for many, with seed investment taking longer than expected to secure. It’s clear there’s currently a concentration by inves-tors towards the bigger funds. We do envisage this changing, but nat-urally political uncertainty is leading to some emerging managers finding it harder to get off the ground at a

18 HFM.GLOBAL

CONTACT GLOBAL OUTSOURCED [email protected] 690 3100

COWEN.COM MEMBER: FINRA/NFA/SIPCCOWEN PRIME SERVICES LLCCOWENCOWEN INC.

Agency-OnlyModel

TradersAcross US &

Global Multi AssetClass Capability

Customized Solutions

CapitalIntroduction

New LaunchConsulting

MiFID II Compliant

Commission Management

OMS &Risk Reporting

Solutions

Shadow Reporting with Multi

Custodial Portal

Middle & Back

Access to Cowen's

InstitutionalPlatform

Connected to 200+ Brokers

& 25+Custodians

CLIENT

COWEN OUTSOURCED TRADING

Cowen provides a high-touch, comprehensive outsourced trading solution, or supplements an existing trading operation, depending on the client’s specific needs. We leverage an established and experienced team of traders in New York, Stamford, Boston, San Francisco, Atlanta, London, and soon to be Hong Kong, along with our existing international network of brokers. Our global reach provides greater breadth of information than a traditional in-house trading desk.

Our outsourced solution provides exceptional value as the client’s trading desk, while averting the cost of building and operating an in-house infrastructure. This allows managers to convert a host of fixed costs into variable ones that can be managed on a pay-as-you-go basis.

The outsourced trading model relieves the burden of managing people and technology, so our clients can concentrate resources on alpha-generating functions, including research, portfolio construction, and risk management.

Cowen’s Global Outsourced Trading Group provides investment managers with a first-rate, cost efficient solution for their trading needs. Our offering is full service, multi-asset class, global, and is differentiated by its transparency and level of operational support.

Best Outsourced Trading Provider Hedgeweek Global Award Winner 2019

Best Prime Broker – Client Service Global Custodian Industry Leaders Award Winner 2018

Prime Broker of the Year The Trade Leaders in Trading Award Winner 2018

Best North American Prime Broker Hedgeweek USA Award Winner 2018


Q JonesTrading recently pub-

lished an article regarding the

cost of running a trading desk in-

ternally vs. outsourcing through an

outsourced trading provider. What

were the main conclusions of that

article?

A The paper evaluated the costs of maintaining in-house trad-

ing desks and the cost of obtaining equivalent level of service from an outsourced trading arrangement and compared them across varying levels of AuM and activity. The anal-ysis demonstrated that outsourced trading offers a clear cost savings

over hiring in-house traders directly, with the exception of highly active funds managing over $1bn. With fee compression trending across the asset management industry, many firms are either already out-sourcing trading or are evaluating a move in that direction.

The component of the analysis I found the most interesting was the disparity between same firm portfo-lio managers and CFO/COOs in the dollar amount relating to the cost of hiring a trader. Most portfolio managers simply stated a flat salary number, while the majority of CFO/COOs were more granular about the total cost of the desk, including ad-ditional factors, such as taxes, trad-ing technology and the Bloomberg terminal.

Subsequently we realised many startups, which are generally lean and typically lack experienced

The outsourced trading firmAndy Volz of JonesTrading explains the

firm’s recent observations on outsourcing

and discusses some of the key issues

influencing the prime brokerage space

Andrew VolzJonesTrading

Andrew Volz serves as head of prime brokerage services for JonesTrading. Volz has over 10 years’ experience helping funds both launch and streamline their business and operations with technology and process. He has worked in a variety of finance and technology related roles, including derivative risk management, hedge fund technology solutions, and algo/smart order routing product management. He has a BA from the University of Connecticut in Management of Information Systems, is a CFA Charterholder and holds the Series 7 and 63 industry licences.

20 HFM.GLOBAL


operations and finance personnel, underestimate the cost of an inter-nal trading desk.

Q From a prime brokerage per-

spective are there similar effi-

ciencies that can be leveraged?

A Yes, very similar. In fact, I would closely compare what we do in

prime services to ‘outsourced prime services’. Where outsourced trading desks perform the same blocking and tackling operationally as their internal counterparts, the success of an introducing prime broker stems from providing smaller funds with access to large bank balance sheets, providing additional servic-es, and administrating a higher lev-el of ‘hand-holding’ and attention, relative to the bigger firms. Like our outsourced trading offering, we provide front-, middle-, and back- office technology, operational sup-port and access to research.

While the larger prime brokers have recently started taking in smaller clients due to the equities environment, we have seen many smaller funds struggle to operate within those platforms. The addi-tional assistance an introducing bro-ker would provide is absent. We have encountered many situations where a client would have been unable to launch without the care and atten-tion we provided.

We solve the customer’s issues with technology, facilities, hiring, allocation logic, and more. These are things that are likely not offered at larger scale firms. Before making the leap from an introducing broker to a direct prime, managers should be certain which additional day-to-day tasks will now fall on their team internally.

Q Is it most common for a firm

to prime and outsource their

trading at the same firm?

A On the smaller scale, yes. The original version of outsourced

trading was the exclusive ‘agency’ outsourced trading model, where the firm engaged a mini prime and executed internally through them. These smaller firms may not have the budgets to pay directed re-search broker commissions and, as a result, these models have worked well. For larger firms, it’s

Q What do you think is the most

important consideration when

choosing a prime broker?

A You’ll want to find a group that can support you and your

specific needs from day one, but also ensure the group is capable of supporting you as you grow. This is true with selecting all central ser-vice providers. Often we encoun-ter new launches whose needs are very basic initially. They may be just entering orders themselves over Bloomberg and using very limited technology. However, as they grow, they may bring on SMAs, grow in complexity from a compliance per-spective, and require additional technology. Switching primary ser-vice providers during that growth phase can cause a great amount of disruption.

Q What other major trends are

you seeing in the industry?

A It has been fascinating to ob-serve the lack of consensus

among the community as to the value and future of the equities trading and financing business. As we all know, some major firms are partially or completely exiting the business, while others are trying to enter or grow their platforms. I think it comes down to two essen-tial components to be successful. First, platforms must be capable of handling all aspects of the equity li-fecycle. Second, firms need to have deep and lasting customer relation-ships. I think it is often overlooked how much of equity trading is still done on a negotiated basis through relationships.

The relationship aspect of prime services is also often overlooked. With the abundance of balance sheets available today fund man-agers are choosing to work with groups they have long-standing re-lationships with.

An outsourced trading firm should be independent, unconflicted and

not a direct competitor with the larger prime brokers

rare that the outsourced trading firm and prime broker would over-lap. Generally, large prime brokers would be reluctant to share re-search from other firms and grant access to the securities lending desks needed for an outsourced trading firm to be effective. With larger firms, especially multi- primed managers, the OT desk and prime will typically be separate. An outsourced trading firm should be independent, unconflicted and not a direct competitor with the larger prime brokers, which is the position we find ourselves in here at Jones. That position leads to the best level of service and least amount of con-flicts for the firm and the customer.

Q What’s driving the launch of

many new prime brokers?

A PB platforms typically take between two and three years

from inception to market. Three years ago there was a fair amount of concern in the market regarding available balance sheets. Five years ago that concern was even great-er, before groups like Wells Fargo and some Canadian banks stepped in to add supply. As a result of be-ing early, those groups have been very successful. Some of the recent launches are probably late given the ‘balance sheet cycle’. However, as with any cycle, things change and when balance sheets become scarce again, for whatever reason, managers will again search for more liquidity providers.

About JonesTrading Prime Services

JonesTrading Prime Services provides a full service integrated platform with front to back office technology solutions, full-service client coverage and operational support, top-tier custody, business consulting and capital introduction services. Our suite of capabilities of-fered frees managers’ time and energy so they can build their franchises and provide their investors with the institutional grade capabilities that are expected in today’s competitive performance environment.

HFM.GLOBAL 21

SECTOR NAMESERVICE DIRECTORY

BCS GLOBAL MARKETSAudrey Faveeuw, Intl. Sales DirectorT: +44 (0) 207 065 2101 // [email protected] Bishopsgate, London, EC2M 3XD

BCS Global Markets is the Investment Banking division of BCS Financial Group a financial service sector pioneer with a 23 years track record. BCS Global Markets is a London-based, FCA-regulated entity. A subsidiary, BCS Americas, is a SEC/FINRA regulated entity.Our team of professionals have built a broad and versatile synthetic prime business offering clients bespoke financing and trading opportunities across international markets via Swap.BCS Prime Services focus on products tailored to clients’ specific requirements, offering flexible solutions where client needs are foremost.

MAYBANK KIM ENGEUROPE: T +44 20 7332 0235 // [email protected]: T: +65 6536 2000 // [email protected]

Maybank Group is a leading provider of financial services. We currently operate across 18 countries including all 10 ASEAN countries, Hong Kong, the UK and the US.At a time when many prime brokers are scaling back their services with smaller funds, Maybank Kim Eng has made a commitment to support these clients.Our platform provides a solution by aiming to be responsive and flexible to the needs of our clients. We are experts in working with different AUMs and servicing requirements. Fee structures have been devel-oped to be flexible and supportive for emerging as well as established fund managers.

JONES TRADING Andrew Volz T: +1 212 907 5348 // [email protected] Jeff LeVeen Jr T: +1 212 907 5375 // [email protected] 3rd Avenue 23rd floor New York NY 10017

JonesTrading brings its relationship model to prime brokerage and outsourced trading. In an increasingly complex and expensive environment, JonesTrading’s deep and broad understanding of trading and prime brokerage has proven to be a cost-effective approach for firms seeking an approach focused solely on their needs.

SOVA CAPITAL LIMITEDRoger Balch, Head of Prime Services Sales / EuropeGary Clifford-Newman, Prime Services Sales / EuropeT. +44 (0) 20 7826 8226 // [email protected] 12th Floor, 88 Wood Street, London, EC2V 7RS

Sova Capital Limited is a UK-based, prime services provider with a significant UK balance sheet. We provide a full range of prime services including enhanced margin financing across a range of asset classes, high-touch, algo and DMA execution services, hybrid account structures (Prime and CASS Segregated Custody Accounts) and enhanced repo and stock loan capabilities. Sova Capital Limited is an EMS agnostic, client-focused service provider with a specific product suite tailored to the emerging manager hedge fund and family office community. Regulated by Financial Conduct Authority (FCA) since 2004.

PRIME BROKERAGE

PRIME BROKERAGE

PRIME BROKERAGE AND OUTSOURCED TRADING

PRIME BROKERAGE

BNY MELLON | PERSHINGMark Aldoroty, Head of Prime Services and Collateral Funding & [email protected]

BNY Mellon’s Pershing and its affiliates provide a comprehensive network of global financial business solutions to advisors, broker-dealers, family offices, hedge fund and ’40 Act fund managers, registered investment advisor firms and wealth managers. Many of the world’s most sophisticated and successful financial services firms rely on Pershing for clearing and custody; investment, wealth and retirement solutions; technology and enterprise data management; trading services; prime brokerage and business consulting. Pershing helps clients improve profitability and drive growth, create capacity and efficiency, attract and retain talent, and manage risk and regulation. Pershing LLC (member FINRA, NYSE, SIPC) is a BNY Mellon company.

PRIME BROKERAGE

email: [email protected] or call UK +44 20 7832 6615

US +1 (212) 268 4919

yourcompany

Topromote

Jack Seibald, managing directorT: +1 516 746 5718 // Mob: +1 516 359 7503 // [email protected] 599 Lexington Avenue, 21st Floor, New York, NY 10022

Kevin LoPrimo, managing director T: +44 20 7071 7555 // [email protected] 1 Snowden Street, 11th Floor London EC2A 2DQ

Cowen Prime Services offers comprehensive brokerage and related services that provide traditional and alternative investment managers with customisable and scalable solutions. We serve hedge fund managers, managed account platforms, institutional investors, family offices, and registered investment advisers with turnkey solutions designed to free clients to focus on their core competencies. Our offering features world-class custody and clearing options, multi-asset class capabilities, leading execution and order management systems, a seasoned execution desk, a range of financing options, a highly professional operations and customer support team, comprehensive portfolio reporting capabilities, and capital introduction.

PRIME BROKERAGE

GPP PRIME BROKERAGEKaaren Callenbach / Lawrence Obertelli / Andrew Rae-Moore T: +44 (0)20 7399 9450 // [email protected]

Alastair Sclater - Hong KongT: +852 3618 9850 // [email protected]

Full service prime brokerage for emerging managers. A high-touch and flexible partnership based service, that offers quick to market account opening, 24/5 global market multi asset-execution, risk management and financing, securities lending and segregated safe custody. Our dedicated and responsive client service is tailored to fully support you to run your business at all stages of the hedge fund life cycle.

PRIME BROKERAGE

22 HFM.GLOBAL PRIME BROKER 2019

Harness the power of BNY Mellon’s Pershing through an award-winning

prime services team that is entirely focused on your needs. From the

seamless movement of collateral to unique financing solutions, we

are poised to help you meet your business challenges at every turn.

We are invested in your success.

For more information, email [email protected]

©2019 Pershing LLC. Pershing LLC, member FINRA, NYSE, SIPC, is a subsidiary of The Bank of New York Mellon Corporation (BNY Mellon).

Pershing does not provide investment advice. Professionally managed investment advisory services, if offered, are provided by Lockwood

Advisors, Inc. (Lockwood), a Pershing affiliate and an investment adviser registered in the United States under the Investment Advisers Act

of 1940. For professional use only. Not intended for use by the general public. Trademark(s) belong to their respective owners.

prime broker 2019 - s11202.pcdn.co€¦ · hfm prime broker 2019 ew managers have a lot to think...

Documents