HSBC Hedge Fund
HSBC Now Offers Services to Hedge FundsHSBC is looking to expand its business by offering prime services to hedge funds. While investment banks have taken a big hit during the financial crisis, prime brokerage is expanding rapidly for those banks that are seen as save havens with a trusted name in the industry. The recent shakeup in the industry has given created opportunities for prime brokerage firms of all sizes.
HSBC hopes to claim a lucrative share of the prime brokerage business with its 50-man unit. The bank hopes to compete with its rivals who offer prime services, but it will be on a more conservative basis. It will lend less and keep assets in segregated accounts--a lesson learned from the collapse of other prime brokerage houses.
The decision to launch the prime services product follows in the wake of last year's collapse of Lehman Brothers when many fund managers, which had used the US investment bank as their prime broker were shocked to find that their assets were frozen.
Cian Burke, who will head HSBC's prime services team, said: "What we are offering is somewhat different to the traditional prime brokerage service, but we feel it is in line with what the market is looking for at the moment.
"Clients are looking for a safe haven for their assets and banks like HSBC can benefit from this flight to quality. Our service brings together the well established custody business with our wholesale banking division to offer what we think will be a very attractive proposition for the market."
HSBC does not plan to compete directly with top prime broking businesses such as Goldman Sachs and Morgan Stanley. Burke, who was previously chief financial officer and global business manager for global markets, said he expected to win market share from second-tier players. Source
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