[ T H O U G H T L E A D E R S H I P | C L E A R S T R E E T ]
The last two years have been a watershed moment in prime brokerage . The events surrounding Archegos Capital Management , the decision of some large banks to exit the prime business altogether , and the novel challenge of ‘ meme stocks ’ like GameStop all increased volatility and spurred questions from clients about both risk management and market access . Parallel to these events , there has been a massive increase in demand for active management as investors seek to navigate market fluctuations induced by the pandemic dislocation , tumultuous geopolitics , difficult macroeconomics , and a shifting rate regime . Despite growing demand , strong trading conditions , and record high hedge fund assets under management , many primes continue to offboard or limit access for a number of active manager clients . Traditional prime brokers are tightening up the requirements to be included on their account lists , resulting in dwindling services and increased costs . Whether the drivers are the changing nature of the business , regulatory and reporting demands , or strict capital requirements , ejecting smaller clients seems to be the preferred path for firms that have not made the necessary investments to upgrade their legacy technology estates . Dependency on highly manual processes means that these firms cannot operate profitably with smaller clients , or clients that have more sophisticated risk profiles or demanding trading strategies . These events and their aftermath have highlighted one of the most pressing issues in prime brokerage : most are still operating on legacy infrastructure . Without a real move to invest in modern technology that can manage risk in today ’ s markets , this cycle of cutting services will continue . There is a clear need in the market for a better prime experience , and clients are demanding better technology and service .
Emerging opportunity Founded in 2018 by industry veterans , Clear Street is an independent , nonbank prime broker designed to solve the industry ’ s most neglected problem : legacy technology . Clear Street has built a proprietary , cloud-native , clearing and custody system to replace the legacy infrastructure used across capital
SEIZING THE OPPORTUNITY ; COMMITTED TO CHANGE
A shrinking prime industry and a lack of innovation is creating an opportunity for those committed to developing and investing in modern technology . Clear Street recognises this opportunity and is putting in the work to make a change .
markets , improving speed , access , and service for its clients . The goal is to give all market participants , from emerging managers to large institutions , the tools and services they need to compete in today ' s fast-paced markets . The firm ’ s modern clearing platform provides clients with everything they need to trade U . S . equities and options , including execution , security financing , fixed income repo , clearing and custody , capital introduction , and reporting . The platform also allows clients to access their data in real-time , without having to wait for overnight batch processing . “ We founded Clear Street to replace the outdated tech infrastructure being used across capital markets ,” said Chris Pento , co-founder and chief executive officer at Clear Street . “ It shouldn ’ t take six months to open an account or a year to begin trading a new asset class . Our cloudnative platform provides the services and data that investors need to compete in today ' s markets .” In May , Clear Street announced the completion of its $ 165 million Series B round , accelerating the launch of its platform as well as helping the firm continue to grow its team , resources , and form new partnerships to meet its goal of improving access to capital markets . The company plans to expand its offering to serve multiple investor types , across multiple asset-classes , on a global scale - all on a single-source platform . If you are looking for scalable products , high-quality service , and better access to capital markets , visit clearstreet . io to learn more .
56 Global Custodian Fund Services Annual 2022