When Midsize is the Right Size

Expected to expand to nearly US$3 trillion within 5 years, the hedge fund industry is significantly changing. To maintain their edge, hedge fund managers increasingly rely on their prime brokers to address growing investor demands, cost pressures and infrastructure requirements.

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Boutique Primes See Boom In Credit Bust

Last summer’s credit crisis—and the ensuing collapse of a number of high-profile funds—has rocked the hedge fund industry. Some prime brokerages have been especially hard-hit, slashing leverage and responding to calls for greater transparency, while others have escaped seemingly unscathed. In fact, smaller prime brokerage shops are thriving, as changes at the top of the industry present an array of new opportunities.

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Clearing Strength Attract JP Morgan

JP Morgan Chase & Co., in a deal backed by the Federal Reserve, agreed last week to purchase faltering Bear Stearns at a discount price. Bear Stearns’ correspondent clearing unit, long second fiddle to the firm’s high-profile prime brokerage and trading businesses, could prove to be a significant acquisition for JP Morgan.

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