Prime Brokerage: One Service to Bind Them All

February 20, 2002

Abstract

Boston, MA, USA February 20, 2002

 

Celent Communications estimates that IT Spending by Prime Brokers will reach well over US$1.2 billion by 2006, as they commit themselves to STP and push towards meeting the impending deadline for the industry-wide T+1 initiative.

In a new report, entitled , Celent examines the current state of the prime brokerage market, looking at the explosive growth of the hedge fund industry and the potential for growth of prime brokers in the US, Europe, and Asia-Pacific.

The days of equating prime brokerage services to simple back-office operations are long gone. Instead, prime brokers now support all aspects of investment management and transactions, ranging from capital formation and clearing and settlement to securities lending, financing, and technology services.

With hedge funds increasingly becoming the investment vehicle of choice for sophisticated investors globally, large prime brokers have also expanded beyond their national boundaries to service the leading hedge funds.

   According to

Sang Lee, Analyst at Celent, "The globalization of hedge funds, coupled with their propensity to use a diverse mixture of financial instruments, has propelled prime brokers to increase their service offerings to better support the sophisticated investment strategies of the leading hedge funds."

He adds that "As the financial services industry marches towards achieving straight through processing (STP), it has become vital for prime brokers to integrate their disparate systems so that they can continue to provide reliable services to the hedge fund industry."

A Table of Contents is available online.

of Celent Communication's Institutional Securities & Investments research service can download the report electronically by clicking on the icon to the left.

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA  February 20, 2002

Return to report Abstract

 

EXECUTIVE SUMMARY 3
INTRODUCTION 4
MARKET OVERVIEW 5
  Prime Brokerage 101 5
  Hedge Funds 9
  Market Trends 14
COMPETITIVE LANDSCAPE 18
  U.S. 20
  Europe 21
  Asia-Pacific 22
PRIME BROKERAGE TECHNOLOGY 23
FUTURE OUTLOOK 27

 

        

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