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Scotia Capital
Scotia has come a long way since it began to service Canadian hedge fund managers at the turn of the century. The Canadian stock loan desks of a decade ago have evolved into full service equity finance operations in New York, London and Singapore, and the bank has built a successful synthetics prime brokerage business in all three regions on the back of the Daiwa acquisition of 2011. Managers like Scotia as a counterparty – Bank of Nova Scotia has an A + credit rating – but, as these results indicate, the bank has also built strong relationships with a sizeable client base. It is disciplined too about what new business it on-boards. The scores for sales and marketing suggest the clients fit the services: They think Scotia prices openly and competitively and puts the right value on their portfolios. A client service model based on a single point of contact from the outset earns its reward in comments as well as scores.“ Client service at Scotia is very strong,” writes one client.“ They are responsive and dependable for all issues.” A second says,“ Scotia is always supportive and helpful. The staff respond to our inquires and requests [ in a ] timely [ manner ].” A third says the“ people are very pro-active in helping us.” On the financing side, Scotia applies the same approach, in particular by customising swaps to individual client needs, but scores and comments suggest the bank could do more to help clients cut costs.“ Would like to see cross margining vs. the PB,” writes one. In the associated field of securities financing, clients have noticed an emphasis on technology, especially by the stock borrowing desks, which are still strong in Canadian securities.“ Excellent improvements made in automation and tech in the stock loan space,” writes a client. But technology, where the bank has relied on vendor systems( notably CoreOne Technologies) to supplement its own platforms, is not the strongest area at Scotia.“ Good portal, can do some improvements,” says one client, while a second says,“ Additional investment in a secure, modern document and data exchange would be helpful.” Others see Scotia is already on the case, with several infrastructure projects in hand to ensure the business can scale without difficulty.“ We have seen Scotia investing in technology with new reports and systems upgrades over the last several years,” writes one respondent.“ There are functions and features that can be further automated to reduce manual processing( e. g. withholding tax for multi-jurisdictions).” Another is“ happy to see Scotia continue to invest in technology.” Any technological shortcomings have clearly not hampered operations, where a model that aligns settlement staff with settlement location works well for clients.“ Personnel are always concerned with the correct settlement of trades and monitors that all funds have proper balances,” says one.“ This is highly appreciated by our firm.” Clients add that they“ do not experience any inefficiencies or delays,” and that operations staff are“ very capable.” Even in capital introductions, Scotia manages to clear the survey benchmark comfortably. One client rated the bank specifically because“ they have been providing excellent capital introductions to our teams.” The fact that not every capital-hungry client has enjoyed the same access(“ It is not good at capital introduction
– they never help us”) is a reminder of how hard it is to please in capital introductions, but also of how disciplined Scotia is in introducing clients it believes it can help to investors who can benefit from their investment strategy, especially in Canada.
30 %
By size
15 %
54 %
Weighted average scores
PROFILE OF RESPONDENTS
Large Medium Small
Weighted average scores by service area Service area
By location
13 %
87 %
2016 2017 2018 5.77 6.13 6.06
Weighted average score
Capital introductions 5.71 6.3 % Client service 6.30 4.7 % Consulting N / A N / A Operations 6.46 8.2 % Technology 5.69 1.7 % Product development 5.25-3.8 % Risk management 6.12 10.0 % Asset safety 6.13 6.9 % Sales and marketing 6.46 5.3 % Trading and execution 5.82-0.5 % Delta 1, swaps and financing 6.05 5.8 % Stock borrowing and lending 6.24 4.5 % Foreign exchange prime brokerage 6.33 11.7 % Fixed income 6.21 7.7 % OTC clearing 5.78-1.2 % Listed derivatives 5.32-9.7 % Total 6.06 4.6 %
Americas Europe and Middle East Asia
+/- the global average
The Hedge Fund Annual 2018 globalcustodian. com 89