Multi-managers and quants reshape prime brokerage
The guest outlined how the rapid growth of multi-manager platforms and quant funds has forced investment banks to integrate their prime brokerage, derivatives, and electronic trading offerings.
The argument
Multi-manager assets under management have grown at a 17% CAGR over nine years to nearly $500 billion, representing 'industrialized alpha' that requires cross-asset, solutions-oriented service. To capture this flow, sell-side firms must operate as integrated ecosystems rather than siloed product desks.
The thesis, stress-tested
✓ What validates it
- ✓Continued market share gains by multi-manager platforms
- ✓Increased prime brokerage revenues reported by large investment banks like Barclays
▸ Risks discussed
- ▸High concentration of institutional assets in a few multi-manager platforms
- ▸Increased systemic risk from highly leveraged, crowded quant strategies
Hear it yourself
"I think over time, I've just learned to kinda balance it all out and see the big picture. But as it relates to covering clients, what I realized, certainly through parts of my early journey with just the protracted bear market, but then really through the financial crisis is it all starts with the client and it all starts with the client and the markets and what they're trying to achieve and how you can help them. What mega trends you can be ahead of the curve for them on. What risks you can be ahead of the curve for them on. How you can be a real partner to them when they need to make the three to five really important portfolio decisions a year."
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