Barclays Capital, which has been building its prime services division globally over the past two years, aims to branch out from synthetic prime brokerage to a full-scale offering to hedge funds and other asset managers, says Ryan Bacher, the bank’s head of prime services for Asia-Pacific.
After establishing an equities trading presence in Hong Kong, Japan, Taiwan, South Korea and India in the past two years, Barclays has been extending its global hedge fund client base from a focus on multi-strategy to the credit, equity long/short, event-driven, relative value and commodities trading adviser categories.
“We are realistic that, at the very least, winning a large mind-share of the synthetic wallet is a very important strategy for us,” says Bacher.
He adds: “We have a full offering [and] are not biased towards any specific strategy and, in fact, most of our clients take a multi-strategy approach. Over time, if we achieve our ambitions, Barclays will be recognised as a full service prime brokerage provider, encompassing synthetics, securities lending, listed futures and options and fixed income financing.”
It builds on the bank’s longer-term target of being a major provider of financing and clearing for equities, fixed income repo, futures, foreign exchange and OTC derivatives.
While the prime services units of many other investment banks are largely geared towards hedge fund clients, Barclays is taking a wider remit in that it will additionally target real money managers, institutional clients, sovereign wealth funds and state entities, says Bacher.
Barclays’ prime services division has 524 staff worldwide. In the region, its prime brokerage initially focused on servicing global asset manager clients with trading activity in Asia, later expanding to serving locally based managers.
According to an AsiaHedge prime brokerage survey in April 2011, Barclays had nearly doubled its market share by AUM in the region to $2.6 billion from $1.4 billion the previous year.
Bacher foresees a continued diversification in hedge fund strategies in Asia, with “a skew towards credit and macro, at the expense of equity long/short”.
He adds: “You’re also having record credit issuances in the last six weeks. It’s a very interesting dynamic and there’s going to be a lot of opportunity in the landscape to step in where capital is leaving quality assets behind.”