Shifts in the APAC prime brokerage space
The Hedge Funds Club speaks with Andrew Bradshaw and Tiffany Besnard of Invast Global about shifts they are seeing in the prime brokerage space after their recent APAC visit.
Given most of Asia has been locked down for the past three years, it was wonderful to see so many fund managers and investors at the recent Hedge Funds Club event in Singapore on the 15th of March. As Hong Kong opens up again, we are also looking forward to the event on the 18th of May at the China Club. Whilst the Invast Global team were in Singapore, we caught up with them just as they jumped off a whirlwind tour of Hong Kong where they met with many different fund managers and service providers in the industry. The overwhelming general consensus was that access to Tier 1 primes had become more difficult recently. This is in line with what we hear from emerging managers. This trend seems to be increasing exponentially as we witness the recent events globally in banking, which has compounded the issue. We spoke to Andrew Bradshaw, Head of Prime Services at Invast Global, about his thoughts after visiting both cities and attending the HFC event, “We are astonished at the high level of interest shown by managers of smaller and emerging funds in our global full-service offering covering equity, macro, CTA, systematic/quant strategies.”
The Hedge Funds Club certainly felt this with the overwhelming demand to attend the evening at the Tower Club, it was standing-room only as over 300 hedge fund industry professionals gathered, it was even more well attended than the last event in September last year. Andrew concurs, “Having been at both, I can attest that whilst the room was tight in September, it was even more so at this event.” Tiffany Besnard, Head of Hedge Fund sales was a first-time attendee at the HFC event having only recently joined the Australian-based prime broker, “I was very pleasantly surprised by the levels of interest we had for our global investment bank solution.” We can certainly attest that we see that there are funds looking to grow and Andrew and Tiffany found there was an appetite for the Invast Global offering from those who currently have a more “retail” or private banking-style partner. “What we heard from those we spoke to was that their current partners were expensive and rudimentary. Whether they were working with private banks or a more retail-orientated partner, they were found left lacking when it came to service. This can also make these funds less appealing to potential investors performing due diligence.” Alternatively, these funds may be dissatisfied with their current commercial partner as they find themselves facing increased charges or minimum monthly fees. “We see a lot of interest from fund managers who feel as if they are not a priority and want a better solution,” states Tiffany. Andrew concurs, “Many of these funds are feeling that they are not a priority.” Given the market contraction in the prime space, some funds will find themselves on the bottom ranking of Tier 1 partners commercially. The Invast team would agree with this market tightening affecting many fund managers in Hong Kong and Singapore. “We had numerous discussions where the issues of a lack of execution or post-trade coverage were an issue. They also raised that there had been problems with effective integration to service providers, reporting and other issues which require a hands-on approach to solve,” notes Andrew. “Invast Global can offer a long-term solution” states Tiffany. Invast Global is very well positioned to serve mid-sized funds that should have a second PB for DD and counterparty risk diversification reasons but are not being serviced by a Tier 1 prime broker.
