Leveraged Funds and Prime Brokerage Relationships: Evidence from a New Database
Finadium has analyzed a new database of Form ADV filings from the US Securities and Exchange Commission. The data, compiled from registered funds listing a prime brokerage relationship, shed new light on the size and composition of both the leveraged fund industry and their prime brokerage services providers.
While the extent of relationships between the biggest funds and the largest prime brokers will come as no surprise, other segments of market data show attractive opportunities for prime brokers outside of the top tier. In this report, we analyze the Form ADV data across general trends, the largest funds and a middle tier of $500 million to $2 billion in assets.
The data can also be used to project the impact of future market events: we offer a breakout on how the acquisition of Deutsche Bank’s equity finance business by BNP Paribas is likely to change competitive dynamics.
For regulators and service providers, the data contain useful indicators of where systemic risk could occur, and what types of funds are gravitating to which types of prime brokers.
This Form ADV database is available to Finadium subscribers on our website. Clients can conduct their own searches and analysis, and download the data, using a customizable GUI.