The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Hedge funds: How to be the prime de la prime

Hedge fund managers are increasingly shopping around and using more than one prime broker at the same time.

Just how are prime brokers going to make sure they are just that – a hedge fund’s prime broker? Competition is heating up among them as they make the startling discovery that hedge fund managers are not averse to using more than one prime broker at the same time [see Fund Management news, Hedge funds go outsourcing, this issue].

Now that hedge fund managers have squeezed prime brokerage fees, the only means of differentiation is levels of service, and managers are rightly prepared to shop around and use several specialists if need be. Furthermore, software companies have facilitated the cost-efficient and simple use of multiple brokers by managers.

As competition for new asset inflows grows, hedge funds are increasingly turning to prime brokers for capital introduction services. According to a survey by Greenwich Associates, the proportion of hedge funds citing capital introduction as an important factor in evaluating prime brokers has doubled from 7% to 14% since last year.

Financing and repo capabilities are also important criteria for selection. The pressure on dealers to meet hedge fund demands in this area and hold on to the lucrative fees they pay is obvious. Seventy per cent of dealers are accepting collateral of a lower credit quality than a year ago on their hedge fund repo business.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree