HSBC creates 50-strong team for new hedge fund service
HSBC has created a 50-man team to try to win lucrative business from hedge funds and traditional asset managers with a range of investor-services type businesses that are aimed at winning a greater share of the prime brokerage market.
In a memo to staff this morning from head of global markets, Samir Assaf, and global head of securities services, Tim Howell, HSBC announced the creation of the unit, will initially employ as many as 50 staff, although this is likely to increase over the next 12 months as the bank expands the operations.
This "prime services" division will bring together HSBC’s custody business with its global markets division and will offer clients a service similar to that offered by a traditional prime brokerage desk offered by rival banks.
However, HSBC's prime services offering will be more conservative – as the levels of lending will be lower and assets will be held in segregated accounts, and therefore protected in the potential event of the bank's collapse.
The decision to launch the prime services product follows in the wake of last year’s collapse of Lehman Brothers when many fund managers, which had used the US investment bank as their prime broker were shocked to find that their assets were frozen.
Cian Burke, who will head HSBC’s prime services team, said: “What we are offering is somewhat different to the traditional prime brokerage service, but we feel it is in line with what the market is looking for at the moment.
“Clients are looking for a safe haven for their assets and banks like HSBC can benefit from this flight to quality. Our service brings together the well established custody business with our wholesale banking division to offer what we think will be a very attractive proposition for the market.”
HSBC does not plan to compete directly with top prime broking businesses such as Goldman Sachs and Morgan Stanley. Burke, who was previously chief financial officer and global business manager for global markets, said he expected to win market share from second-tier players.
-- Write to Harry Wilson at hwilson@efinancialnews.com
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