Multiple choices – Not all prime brokers are created equal: Joel Clark investigates the criteria employed by hedge funds to differentiate one prime broker from another, and concludes that the multi-broker model is the most feasible and flexible approach f
Selecting a broker is a difficult choice for any institution in the financial markets, but for hedge funds that move in the shadows and are cautious of revealing even a hint of their alpha-generating strategies, that selection is even more complex. As the majority of prime brokers act within the walls of investment banks that trade in the same markets, hedge funds have to be sure they have found a worthy, trusted bank to take them to market.
For the investment banks, prime brokerage has become
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