[ I N D E P T H | P R I M E B R O K E R A G E ]
The challengers Outside of the biggest three primes , a group of banks with different geographical profiles and offerings exists in the likes of Bank of America , UBS , Barclays , Citi and Wells Fargo . Within this group used to be Credit Suisse , which made the Swiss bank ’ s exit of the space such a landmark moment for the prime brokerage market .
In November 2021 , the bank announced it would all but exit prime services following the fallout from the collapse of Archegos Capital Management which cost Credit Suisse $ 5.5 billion and forced a wholesale review of risk management across the business . In the aftermath , the bank said it would place risk management at the core of its bank and focus on a “ culture that reinforces the importance of accountability and responsibility ”.
With a market share around 5 %, the exit was significant . Clients were referred to BNP Paribas , in what seemed like a major coup for the French bank – which had also recently onboarded Deutsche Bank ’ s clients , who represented around $ 200 billion in assets . But the reality was that the larger funds had probably made their move already , eyeing the biggest three providers , while others may have explored elsewhere .
The referral to BNP Paribas certainly made sense , given the bank was another major European outfit , but clients filtered through the entire ranks of the prime brokerage world and forced a major shake-up . Everyone benefited in some way or another .
For BNP , which has been lauded for its growth ambitions
“ We keep hearing over and over again from clients that they ' re concerned with whether the banks will still be there .”
CHRIS PENTO , CEO , CLEAR STREET
in the space and expertise in certain asset classes , a major blow came this summer when its head of prime brokerage , Ashley Wilson , left for rival UBS . Wilson ’ s departure was one of many throughout 2022 as the game of musical chairs stretched beyond the providers into the personnel .
Many other players saw opportunities in the industry shake-up and the likes of Cowen , Cantor Fitzgerald and Jefferies have all looked to capitalise , though without being “ ambulance chasers ”, as one source highlights . This section of market is fierce in competition , with specialities and areas of focus differing between the aforementioned and the likes of Fidelity , Interactive Brokers , BTIG and
52 // TheTRADE // Q4 2022