Hedge Funds

Hedge Funds, Prime Brokerage, Securities Lending

automation, hedge funds, Prime Brokerage, topstory

We’ve been hearing some trends from prime brokers about how to grow their franchises in spite of weak hedge funds returns in 2018 and no end to the concentration in…

Hedge fund closures down in 2018, assets are up but performance is muted

October 30, 2018

Hedge Funds

Barclay Hedge, eVestment, hedge funds, HFR, securities finance, topstory

The hedge fund industry is seeing an uptick in assets and fewer funds closed in 2018 than 2017, but only a portion of those funds posted positive returns. As hedge…

Manmohan Singh’s latest, “Leverage – A Broader View,” shows that build up in the banking system from off-balance sheet trades is huge

Manmohan Singh and Zohair Alam of the IMF have written an important white paper “Leverage—A Broader View” (March 19 2018, IMF Working Paper WP/18/62) that looks at off-balance sheet leverage.…

Best practices for buy-side securities lending at FISL NYC and London – not just a good idea but important for revenues and risk management

March 12, 2018

Hedge Funds, Investments, Pension Management, Securities Lending

best practices, Finadium, FISL, Securities Lending

Securities lending has strong legitimacy in capital markets as a revenue generating activity for clients, and for passive funds can make the difference between a top ranking and falling near…

Top commercial transactions of the last week (Premium)

March 6, 2018

Blockchain, Custodians, Hedge Funds, Securities Lending, Technology

blockchain, Custodians, Custody, hedge funds, Securities Lending, topstory

Custodians, asset managers, hedge funds and vendors all made some notable trades in the middle of Q1. We offer an analysis of three important deals for the industry including who…

Securities finance as an alpha generator on the buy-side? A FISL NYC and London afternoon session

January 11, 2018

FISL, Hedge Funds, Investments, Repo, Securities Lending

Alpha generation, asset managers, Finadium, FISL, hedge funds, securities finance, topstory

Can hedge funds and asset managers generate meaningful alpha for their portfolios using securities finance? This is an important question for both the funds themselves and the professionals that work…

Bank of England on hedge fund and PB risk: better than it used to be but issues remain

January 4, 2018

Bank of England, Credit Exposure, Europe, Hedge Funds, Investments, Prime Brokerage, Pro-cyclicality, Risk Management, Systemic Risk

Bank of England, hedge funds, Initial Margin, prime brokers, Procyclicality, topstory

A recent publication from the Bank of England shows that hedge fund systemic risk is generally lower than it used to be; that’s a good thing for the markets. Hedge…

The plot thickens: the first amended complaint on US banks alleging collusion in securities lending shows the fruits of discovery (Premium)

December 19, 2017

Hedge Funds, Investments, Pension Management, Prime Brokerage, Securities Lending

Equilend, lawsuit, Securities Lending, topstory

We’ve been tracking the complaint against US prime brokers and EquiLend by what are now four pensions and a hedge fund. The latest amendment shows new depth to the argument,…

Finadium Report: Analysis from the US Rates & Repo 2017 Conference

December 5, 2017

Hedge Funds, Investments, Repo, US

events, Finadium, FISL, hedge funds, Rates & Repo, Repo, topstory, US

Finadium has documented the questions and feedback from our November 1, 2017 Rates & Repo event in New York as a research report. The event drew 145 attendees, with 34%…

Our analysis of IOSCO’s latest hedge fund survey (Premium)

November 27, 2017

Hedge Funds, IOSCO, Liquidity Management

hedge funds, IOSCO, Leverage, topstory

IOSCO released their 2016 data analysis of hedge fund assets, leverage and liquidity. While this document always feels a bit dated compared to current markets, it also has some kernels…

Recap of Finadium’s Rates & Repo Conference 2017 in New York

November 6, 2017

Hedge Funds, Investments, Money Market Funds, Repo, US

Finadium, hedge funds, Rates & Repo, Repo, topstory, US

We are pleased to report that our first Rates & Repo Conference, held last week in New York, was by all accounts a great success. We had 162 registrations by…

There are impacts from the US securities lending lawsuit no matter what happens (Premium)

October 17, 2017

Hedge Funds, Prime Brokerage, Securities Lending

hedge funds, lawsuit, Prime Brokerage, Securities Lending, topstory

The lawsuit against six banks and EquiLend, with some big pensions signed on as plaintiffs, already has likely outcomes and plausible winners regardless of any judgement. Some market participants and…

Does the lawsuit against US banks alleging collusion in securities lending make sense? (Premium)

August 21, 2017

Hedge Funds, Investments, Pension Management, Securities Lending

Cohen Milstein, lawsuit, Securities Lending, topstory

On August 17, 2017, law firm Cohen Milstein Sellers & Toll filed a Federal class action lawsuit against six US banks saying that they conspired for years to keep new…

Are the buy side and sell side on the same page about the direction of prime brokerage?

July 3, 2017

Hedge Funds, Investments, Liquidity Management, Prime Brokerage, US

BNY Mellon, buy-side, Finadium, financing, hedge funds, Liquidity, Prime Brokerage, topstory

BNY Mellon released the results of a buy-side survey on liquidity and financing on June 26th. How closely do the concerns and attitudes of investors towards their liquidity and financing…

How important is balance sheet management in prime brokerage today? Look at compensation packages (Premium)

June 27, 2017

Basel III, Dodd-Frank, Hedge Funds, Prime Brokerage, Profitability, Regulatory, US

bank capital, Leverage, Prime Brokerage, Regulatory, topstory

In our survey of US prime brokers released today, we looked at the relationship between balance sheet optimization with hedge fund clients and employee compensation. We followed the thinking that…

The Five Cs of Bank and Client Success in Securities Finance

June 15, 2017

Anand Krishnan

Basel III, Cash management, Central Counterparties, Collateral Management, Derivatives, Hedge Funds, Investments, Repo

ALM, CCPs, collateral, Natixis, Repo, topstory

Today’s global investment banking market continues to be shaped by the need for innovation and synergies driven by an evolving regulatory landscape. We have identified the Five Cs for success…

Slides from our webinar on Securities Finance Market Structure (Premium)

June 13, 2017

Basel III, Collateral Management, Hedge Funds, Investments, Pension Management, Prime Brokerage, Repo, Securities Lending, Technology

Finadium, Regulation, Repo, securities finance, Securities Lending, technology, topstory

We delivered a webinar, Securities Finance Market Structure Trends, on June 13, 2017. Finadium clients can download the presentation below. Continue reading

Are hedge funds really that risky as counterparties in collateralized trading?

June 1, 2017

Collateral Management, Custodians, Hedge Funds, Prime Brokerage, Repo, Securities Lending, Technology

brokers, buy-side, collateral management, credit risk, Custodians, hedge funds, P2P, peer to peer, topstory

1

As Peer to Peer markets make their play, credit departments at buy-side firms around the world are looking askance at the very idea of a collateralized trade directly with a…

Next Steps for Hedge Funds in Cost Management

May 22, 2017

mstan

Basel III, Derivatives, Hedge Funds, Investments, Repo, Securities Lending

hedge funds, Prime Brokerage, Societe Generale, topstory

These are legitimately complex times for hedge funds. Between macropolitical turmoil, negotiating fees and managing their daily activities, hedge fund managers must pay attention to a wide range of factors…

What hedge funds think about Direct/Peer to Peer platforms (Premium)

April 13, 2017

Hedge Funds, Repo, Securities Lending

direct, FISL NYC, hedge funds, peer to peer, topstory

We heard from several hedge funds over the last week on Direct and Peer to Peer platforms. While these platforms are interesting, there are some significant issues that must be…

Would brokers move back into prop trading without Dodd-Frank? (Premium)

January 25, 2017

Dodd-Frank, Hedge Funds, Regulatory, Securities Lending, US

bank capital, brokers, Proprietary Trading, topstory, US, Volcker Rule

If changes to the Volcker Rule come to pass, what is the likelihood that brokers will dust off the prop desks and draw back trading talent that fled to the…

SS&C's acquisition history should give pause to banks in alternatives management and fund technology

December 19, 2016

Hedge Funds, Prime Brokerage, Technology

Fund Administration, SS&C, technology, topstory

SS&C’s acquisition of Conifer Securities, announced last week, shows again the firm’s strategic growth path in the alternatives, fund administration and financial technology sector. The collection of Conifer’s 200 clients…

Prime brokers, credit intermediation and new trading networks in securities finance (Premium)

November 8, 2016

Hedge Funds, Investments, Prime Brokerage, Repo, Securities Lending

Agency Prime Brokerage, DBV-X, direct, Elixium, peer to peer, topstory

Back in April 2016 we laid out our ideas for Agency Prime Brokerage, a business model where prime brokers provide a range of operational functions in financing without credit intermediation.…

Falling leverage and low volatility threaten Europe’s hedge funds

October 10, 2016

Paul Amery

Europe, Hedge Funds, Investments, Prime Brokerage

BIS, fees, hedge funds, NSFR, prime brokers, topstory

For European hedge funds, already under pressure for below-target returns, low volatility and falling leverage threaten to add up to a toxic mix. Regulators may be happy with less leverage…

The technical details on how direct/peer-to-peer borrowing increases US customer trading leverage (Premium)

September 28, 2016

Cash management, Collateral Management, Hedge Funds, Prime Brokerage, Securities Lending, US

arranged financing, direct, Enhanced leverage, peer to peer, Securities Lending, topstory, US

In this article we look at the benefits a US trading customer gains by borrowing to cover their own short positions. Like Fully Paid Lending, direct borrowing and lending is…

Finadium: Update on Direct and Peer to Peer Transactions in Securities Lending and Repo

September 12, 2016

Collateral Management, Hedge Funds, Repo, Securities Lending

direct, Finadium, P2P, peer to peer, topstory

This Finadium Executive Briefing presents the opinions of asset managers on lending to hedge funds and their peer institutions, and provides commentary on the offerings of three large agent lenders…

Redeploying brokerage infrastructure for Direct securities finance transactions (Premium)

July 11, 2016

Hedge Funds, Market infrastructure, Operations, Prime Brokerage, Securities Lending, Technology, US

arranged financing, Direct Borrowing and Lending, Enhanced leverage, hedge funds, Prime Brokerage, topstory

The latest in a long line of once unthinkable changes in securities finance is the concept of direct lending and borrowing between beneficial owners and hedge funds. US brokers have…

Finadium for Hedge Funds: Tools and Information for Alternative Investors

June 21, 2016

alternative asset managers, alternative UCITS, hedge funds, liquid alternatives, topstory

Derivatives, Hedge Funds, Prime Brokerage, Regulatory, Repo, Securities Lending

For our June 2016 Finadium Executive Briefing report, we provide a PowerPoint presentation on important topics in securities finance for alternative investment managers. The presentation covers: Continue reading

Why direct repo and securities lending may be the best thing that has happened for asset holders in a long while (Premium)

March 1, 2016

Hedge Funds, Repo, Securities Lending

asset holders, Beneficial Owners, direct, Repo, Securities Lending, topstory

There is a sea change coming to the market in direct repo and securities lending, at least for many firms that want to continue to earn reliable revenues. The term…

Changes in hedge fund leverage according to IOSCO

December 15, 2015

Collateral Management, Hedge Funds, IOSCO, Regulatory

hedge funds, IOSCO, Leverage, topstory

IOSCO released their third hedge fund survey last week with some expected results and some new information. Most importantly, we have to get used to their definitions of leverage and…

Finadium: Regulatory Costs of OTC Derivatives vs. Securities Finance Transactions

This Finadium report evaluates regulatory costs in order to determine whether internal balance sheet treatment will push the market towards OTC derivatives in place of Securities Finance Transactions (SFTs, including…

Fed Governor Powell on repo CCPs: the opportunities and challenges ahead

November 19, 2015

Federal Reserve, Federal Reserve Governor Powell, topstory

CCP, Central Counterparties, Collateral Management, Dodd-Frank, Featured, Federal Reserve, Hedge Funds, Market infrastructure, Money Market Funds, Regulatory, Repo, Securities Lending, Tri-Party Repo

1

Earlier this week Fed Governor Jerome Powell gave an interesting speech at the Clearinghouse annual meeting, “Central Clearing in an Interdependent World”, addressing expanding central clearing for repo.Continue reading

Finadium: Balance Sheet Optimization Strategies (Self-Funding) for Hedge Funds and Other Alternative Asset Managers

November 12, 2015

Basel III, Collateral Management, Derivatives, Hedge Funds, Investments, Prime Brokerage, Regulatory, Repo, Securities Lending, Technology

Balance sheet, Finadium, hedge funds, optimization, self-funding, topstory

Finadium has released a new Executive Briefing report on balance sheet optimization strategies for hedge funds. Hedge funds and other alternative asset managers have been hearing about balance sheet optimization,…

Reporting date differences allow non-US broker dealers to arb repo markets

November 5, 2015

Basel III, Derivatives, Dodd-Frank, Featured, Hedge Funds, Market infrastructure, Money Market Funds, Regulatory, Repo, Total Return Swaps, Tri-Party Repo

topstory

Late last month the OFR published a paper, “Regulatory Arbitrage in Repo Markets” by Benjamin Munyan (October 29, 2015) that got a decent amount of press. The paper looked at…

An abundance of Special Purpose Vehicles (Premium Content)

October 20, 2015

Collateral Management, Derivatives, Hedge Funds, Investments, Prime Brokerage

Business Development Companies, hedge funds, prime brokers, SIVs, Special Purpose Vehicles, topstory

We continue to note a growth in the number of Special Purpose Vehicles in the market, the majority of which (but not all) are sponsored by banks and brokers. We…

Five reasons why prime brokers say different things about balance sheet scarcity to their hedge fund clients (Premium Content)

September 23, 2015

Basel III, Credit Exposure, Featured, Hedge Funds, Investments, Liquidity Management, Prime Brokerage, Regulatory

Balance sheet, corporate bond liquidity, hedge funds, Liquidity, prime brokers, Regulation, topstory

We were recently asked why prime brokers are reporting different information to their hedge fund clients on why balance sheets have been tightening. The “balance sheet is scarce” story might…

Two solutions to the Hot Cash / operational deposits problem (Premium Content)

September 9, 2015

Basel III, Cash management, Hedge Funds, Investments, Liquidity Management, Prime Brokerage, Repo, Systemic Risk

Basel III, Citi, Hot Cash, LCR, short-term cash, SPVs, structured notes, topstory, UBS

1

The problem of prime brokers and custodians holding hedge fund cash and other operational deposits is becoming acute. We are now seeing two sets of solutions emerge to solve this…

Connecting corporate cash with repo. Why has it been so hard?

June 2, 2015

Cash management, Collateral Management, Europe, Featured, Hedge Funds, Repo

DBV-X, Euroclear, GMRA, topstory

There was in interesting article in the May 2015 Treasury Today “Do you have time for tri-party repos?”. What struck us was the difficult time corporate cash investors have setting…

The SEC’s ADV data: hedge fund edition (Premium Content)

April 23, 2015

Hedge Funds, Investments, SEC, US

asset managers, Form ADV, Form PF, hedge funds, sec, topstory

The SEC recently released their Form ADV data on investment managers including a large number of hedge funds. The data err on the side of conservatism in non-disclosure and can…

Finadium: The Securities Lending Industry in 2015

April 21, 2015

Central Counterparties, Collateral Management, Hedge Funds, Investments, Prime Brokerage, Securities Lending

Agent Lenders, asset managers, collateral management, hedge funds, non-cash, pensions, prime brokers, Securities Lending, topstory

A new report from Finadium provides a data-oriented overview of the securities lending industry in 2015 including the players, market size and regulatory drivers affecting participant behavior. Data are sourced…

Finadium: Custody for long/short funds

March 10, 2015

Custodians, Hedge Funds, Prime Brokerage, Securities Lending

Custody, Finadium, hedge funds, long/short funds, Prime Brokerage, Prime Custody, topstory

Finadium has released a new research report, “Evaluating and Selecting a Custodian for Long/Short Investment Funds.” This report is a discussion of important points for long/short funds to consider in…

We need simple new names for financial market institutions (Premium Content)

We argue for better language to describe various functions in financial markets. There are banks and bank holding companies that offer a wide variety of credit intermediation and agency services.…

The CME starts to get serious about repo clearing (Premium Content)

January 20, 2015

CCP, Hedge Funds, Repo

CCPs, CME Group, DTCC, hedge funds, LCH.Clearnet, Options Clearing Corp, Repo, topstory

We heard last week from three different market participants that the CME is engaging with market participants on a repo clearing project. CME’s involvement has been known publicly for some…

Finadium: Perspectives on Direct Borrowing and Lending

January 14, 2015

Collateral Management, Credit Exposure, Hedge Funds, Investments, Repo, Securities Lending

Agent Lenders, Beneficial Owners, Credit Exposure, Direct Borrowing and Lending, hedge funds, REITs, Repo, Securities Lending, topstory

Finadium has released a new report in our Finadium for Investors series, “Perspectives on Direct Borrowing and Lending”. The report defines Direct Borrowing and Lending, sizes the market, evaluates pros…

Bleeding Oil: Securities Finance Industry Analysis

December 11, 2014

Christopher Gohlke

Hedge Funds, Prime Brokerage, Securities Lending

DataLend, market data, Securities Lending, topstory

By Chris Benedict, Director, DataLend. Lower oil prices due to a glut of supply and a strong dollar are an early Christmas gift to consumers but a big lump of…

Finadium: Capitalizing on Synthetic Financing Demand (free via SunGard)

November 12, 2014

Delta One, Derivatives, Hedge Funds, Prime Brokerage, Securities Lending

Delta One, Finadium, SunGard, synthetic financing, topstory

Delta One, synthetic financing and synthetic prime brokerage have long been a part of financial markets, but the upcoming introduction of Basel III capital rules is increasing their popularity. On…

Repo CCPs for the buy-side – what will it take?

October 7, 2014

CCP, Derivatives, Featured, Hedge Funds, Market infrastructure, Repo, Tri-Party Repo

Eurex, Eurex Clearing, topstory

Repo CCPs already exist. LCH and FICC run repo CCPs; so does the Canadian Derivatives Clearing Corp. But they only serve banks and broker-dealers. Why not investors too? Well, the…

More innovative products and ideas in securities finance

It is no secret that regulatory change brings out innovation (necessity and all that). Lately we’ve been seeing more proof of this in the securities finance space. Besides product launches…

Citi report on hedge funds and collateral: modeling an efficient counterparty

July 15, 2014

Collateral Management, Hedge Funds, Investments, Prime Brokerage

asset managers, Balance sheet, Citi, hedge funds, long/short, prime brokers