Hedge Funds Investment Banks
Top Hedge Funds Get a Peek from Investment Banks
Investment banks are increasing their efforts to attract hedge fund clients, but one practice may draw the ire of regulators and some banks. The practice of giving top hedge fund clients select access to senior deal makers and corporate executives is not new but it is now attracting attention from lawmakers and others.
The lunch meeting casts a spotlight on a practice that has long occurred in the shadows of Wall Street and the City of London—but which is now causing concern among regulators and some banks.
Investment banks vie for business from elite hedge funds by offering traders at those funds special access to senior deal makers and corporate executives at dinners and other gatherings. The traders sometimes pick up valuable nuggets of information that aren't available to other investors, according to people who have attended such gatherings.
The meetings are held by many of the world's largest investment banks for their hedge-fund clients. The funds are prized clients because they collectively pay billions of dollars in fees each year for buying and selling stocks. Banks including Bank of America Corp., Barclays PLC, Citigroup Inc., Credit Suisse Group AG, J.P. Morgan, Morgan Stanley, UBS AG and Scotiabank host the gatherings, generally several times a year or more, according to traders, bankers and brokers. Source
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