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European hedge funds boost Convergex PB business
17 January 2017
Convergex notes "steady rise" in European hedge funds looking for US prime brokers
New York-based Convergex says its prime brokerage division
added over $1bn in assets last year, helped by an influx of
business from European-based hedge funds.
The firm has been building out its prime services package in
recent years, offering a suite of products to alternative
managers, family offices and investment advisors.
Trading, custody, clearing, capital raising and research
form the bulk of the services.
Recent enhancements, including improved futures execution
and securities lending capabilities, have helped generate
additional interest from firms at home and abroad.
The growth comes as tougher capital standards (Basel III in
Europe), lower liquidity and eroding margins continue to put
pressure on the major prime brokerage participants.
As a result, many of Convergex’s target clients
are the same small-to medium-sized funds deemed undesirable by
the large investment banks.
Doug Nelson, Convergex executive managing director and head
of global clearing and prime services, said Convergex has been
seeing a "steady increase" in the number of European-based
hedge funds looking for US prime brokers.
"They have found the full scope of our product offerings to
be a safer and more cost-effective alternative," he said,
adding that Convergex is focused on expanding its European
Philip Gough currently heads up Convergex’s
London-based brokerage business.