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Barclays
e have had outstanding experience with the people at
“ WBarclays for client service,” says a client.“ Everyone is very responsive and eager to get the answers we need.” Another respondent name-checks his relationship manager for doing“ an outstanding job on being our advocate within Barclays and delivering us value and excellent service.” A third writes simply of an“ amazing platform, very happy with Barclays.” As it happens, however, Barclays does better in sales and marketing( where it is judged mainly by what it charges its clients and how it measures its return on their assets) than client service. But where the bank actually tops-scores is in stock borrowing, with respondents agreeing Barclays outperforms in the two most important tests of a stock loan provider: excellent access to hard-to-borrows and minimal recalls of stocks on loan. A client adds that the Barclays stock loan desk“ do an amazing job to provide accurate colour and keep us in names that trade special.” The clearing services of the bank are assessed by a smaller contingent of respondents, but Barclays was an early adopter of specialised agency clearing services when post-crisis regulation drove swaps into a cleared environment, and the excellent scores suggest the additional experience is paying off. The futures business is almost as highly rated, though the detail suggests clients are still looking for tighter integration of both derivatives businesses with their equity and fixed income counterparts( an issue of longstanding in the prime brokerage industry that is far from peculiar to Barclays). The score in fixed income in particular – where respondents judge providers mainly by execution – is impressive. Barclays would prefer to be judged on the quality of its cash and synthetic equity and fixed income financing, and the financing score certainly does not embarrass the bank. Its margin netting policy is not unnoticed either. This pattern is likely to persist, given that financing hedge funds has become a major contributor to the overall performance of the bank. Importantly, given that asset safety and access to finance are not easy to combine, Barclays also collects points for an approach to asset safety that revolves around legal entities. The banks will be disappointed, though, by the collective assessment of its foreign exchange prime brokerage platform, which includes a choice of give-up, trading through the BARX electronic platform, or being routed to the major FX platforms. The issue, of course, is not execution but cost, including transaction costs as well as collateral. The wider foreign exchange markets are undergoing a potentially far-reaching structural change, and even a bank with such an entrenched position must be mindful of changing attitudes on the buy-side and new entrants on the sell-side. The verdict on capital introductions is also less than generous, though a client notes that Barclays has“ been helpful in the UK and Switzerland.” The bank looks mainly to its institutional investor sales people to marry capital to managers, which is not always the perspective managers prefer, though Barclays says it also helps funds position themselves with likely sources of capital. Where the bank will be happier with the outcome, given its Lehman heritage and what it now offers as“ quantitative prime services,” is the scoring of its trading and execution services. The detail suggests technical improvement is always possible, but no respondent is suggesting the Barclays model is anything but fair to them. That is a deeply reassuring sign, given the recent history of the parent bank.
19 %
By size
52 %
29 %
Weighted average scores
PROFILE OF RESPONDENTS
Large Medium Small
24 %
By location
2016 2017 2018 5.54 5.43 5.64
Weighted average scores by service area Service area
5 %
71 %
Weighted average score
Americas Europe and Middle East Asia
+/- the global average
Capital introductions 4.80-10.5 % Client service 5.73-4.7 % Consulting N / A N / A Operations 5.75-3.6 % Technology 5.09-9.0 % Product development 5.60 2.6 % Risk management 5.13-7.8 % Asset safety 5.21-9.2 % Sales and marketing 6.08-0.8 % Trading and execution 5.86 0.2 % Delta 1, swaps and financing 5.79 1.2 % Stock borrowing and lending 6.28 5.3 % Foreign exchange prime brokerage 5.01-11.6 % Fixed income 6.14 6.5 % OTC clearing 6.24 6.7 % Listed derivatives 6.02 2.3 % Total 5.64-2.8 %
76 Global Custodian The Hedge Fund Annual 2018