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A shifting prime
brokerage landscape
A tumultuous two years for the prime brokerage space has seen exits , scandals and a renewed approach to risk management which has truly shaken up the industry . But don ’ t think for a second primes are struggling , as opportunity beckons for those willing to invest and appeal to funds with market share up for grabs , writes Jonathan Watkins .
Welcome to prime brokerage in 2022 . It ’ s a fastpaced world of high-profile exits and market share reshuffling , of revolving doors in the most senior positions , and headline-grabbing sagas which could well end up being the subject of a Michael Lewis book in years to come . The change has been biblical . With household names Credit Suisse , Deutsche Bank and Nomura all but departing the scene , the landscape has shifted dramatically . What remains are three Goliaths staring down at a field of plucky challengers moving upstream , and new entrants swooping in at the lower end of the market armed with the latest technology in a legacy-wrapped world . The ripple effect has seen fierce competition for those larger clients who were found shopping for new partners following the exits of their former primes , and gaps in the servicing of smaller , and newer , funds . Some remaining bank primes are seeking a diversification of clients , with widespread talk of offboarding or limiting access for numerous funds . The seismic change and adversity of the past 24 months has seen a shift in risk appetites and approaches , as primes are cognisant of the past : learning lessons from Covid , the meme stock phenomenon and the collapse of Archegos Capital . Opportunities for those still in the game
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