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Nomura
What is least surprising about these scores is that Nomura top-scores for trading and execution. With Instinet as its execution engine outside Japan, the firm owns significant market share in Europe as well as Japan. It gives Nomura an edge in servicing quantitative strategies, which it can then ply with margining and financing as well as execution and clearing.“ Trading and execution are key services for us,” says a client.“ The team is reliable, attentive and overall of very high quality.” The score for operations, mitigated by concerns about staffing and internal communication, suggests the post-trade experience does not undo the good work in the front office. Comments as well as scores testify to an ability to keep clients in their trades, especially when it comes to sourcing stock in Japan, where Nomura has the inestimable advantage of more than 3 million retail customers.“ Great team, which does everything in their power to minimise recalls,” writes a client.“ Not surprisingly SL access is particularly strong in Japan.” Clients even like the custody options.“ Nomura has a mirror account that offered complete segregation,” notes a client concerned about asset safety.“ In time of stress, we can easily move assets into this segregated account, which offers some comfort.” More importantly, the sales and marketing scores confirm that even clients sensitive to transactions costs do not believe they are being over-charged and are convinced that Nomura values their business enough to want a long-term relationship. The client who appreciates“ their long-term vision to partner with promising funds rather than look at day one profitability” is more representative than the one who expresses anxiety about the“ future direction of the PB and the range of services they offer.” In fact, recent high-profile hires on both sides of the Atlantic are aimed squarely at addressing the vulnerability in product development(“ not really seen anything new from them in a long time”). Nomura will, nevertheless, be disappointed to read that“ the firm does change margin on certain instruments fairly regularly,” and that“ the margin framework is quite conservative for my portfolio / strategy,” since it aims to be competitive on margin. The detailed scores do suggest the firm needs to do more for clients on cross-margining and netting. Technology is another area where clients would like investment. Though a platform geared to the needs of quantitative managers may not suit all investment strategies, the significant issue is mobile reporting.“ Reporting portal is old and slow,” says a client. A second adds that“ faced with certain system limitations, the Nomura prime brokerage client services team makes up for it by going the extra mile.” There is certainly nothing wrong with the score for client service.“ Nomura is a key strategic partner for our firm, and that in large part has to do with our relationship with the client services team,” explains a respondent.“ The team is of extremely high quality and gives us confidence that Nomura is invested in our firm’ s success.” Other vulnerabilities are more apparent than real. Nomura would not disagree with the client who says“ They are not too fond of fixed income, and the service shows that.” The firm clear swaps in Japan only. It has capital introductions teams in Tokyo and Hong Kong only, focused on Japanese and
Asian allocators. In consulting, Nomura prefers to be judged by the quality of its advice on regulatory and strategic issues. Classical consulting is confined largely to Asian start-ups and, even there, no team is dedicated to it.
26 %
By size
5 %
69 %
Weighted average scores
PROFILE OF RESPONDENTS
Large Medium Small
Weighted average scores by service area Service area
74 %
By location
14 %
2016 2017 2018 5.76 6.01 5.79
Weighted average score
Capital introductions 5.00-6.8 % Client service 6.13 2.0 % Consulting 5.83-0.5 % Operations 5.94-0.5 % Technology 5.29-5.6 % Product development 5.10-6.6 % Risk management 5.64 1.3 % Asset safety 5.73-0.2 % Sales and marketing 6.05-1.3 % Trading and execution 6.07 3.7 % Delta 1, swaps and financing 5.78 1.1 % Stock borrowing and lending 5.74-3.8 %
12 %
Foreign exchange prime brokerage N / A N / A Fixed income 5.77-0.1 % OTC clearing 5.89 0.7 % Listed derivatives 5.81-1.4 % Total 5.79-0.2 %
Americas Europe and Middle East Asia
+/- the global average
The Hedge Fund Annual 2018 globalcustodian. com 87