Clearing Up

The collapse of Bear Stearns and Lehman Brothers back in 2008 left few parts of the capital markets untouched. Hedge funds were no exception. Many buy-side firms had trades outstanding with Lehman’s brokerage businesses, for example, and were left facing the unenviable prospect of liaising directly with the administrators in an attempt to deal with the fallout.

Faced with the all-too-real possibility of a major investment bank folding, most hedge funds significantly increased the number of prime