BoA-Merrill suffers prime brokerage exits

Half a dozen executives from the firm's Asia prime brokerage team have taken flight over the past year, even as the business has recorded gains in market share.
BoA-Merrill suffers prime brokerage exits

A string of executive exits from Bank of America-Merrill Lynch’s regional prime brokerage team in the past year comes at an awkward juncture, with the loss of key team members around the time of a favourable report into its market share.

Jim Fallon, who had served as a director of financing sales and was the most senior member of the Singapore prime brokerage team, is the latest to depart from BoA-Merrill, having left last month. 

Fallon is an industry veteran who joined BoA-Merrill in 2009 after posts at Morgan Stanley’s prime brokerage operations in New York and Hong Kong, and also with fund of hedge fund Tremont.  

It is the most recent of a series of executive exits from BoA-Merrill's regional prime brokerage team in the past year. Sam Tabar, head of Asia-Pacific capital introductions, left in May, while Brian Canniffe, regional head of global markets financing and futures, stepped down in February.

Denis Kelliher departed as head of Asia margin and risk this spring, while Dan McNicholas, who served as the bank’s Asia financing sales, left in September last year.

The flight of senior client-facing executives comes at an unusual juncture, coinciding with a recently released report showing that BoA-Merrill has grown prime brokerage market share in the year to April.

It now ranks as the sixth largest prime brokerage in Asia with an estimated $6 billion in AUM, according to an AsiaHedge survey. Last year BoA-Merrill was ranked seventh by AsiaHedge, with an estimated $4.4 billion in AUM.   

Those who have left have had their duties undertaken by existing or new staff. It is understood that the exits are unrelated to a bank-wide, global cost-cutting plan called Project BAC, which entails a reduction of about 30,000 jobs. Some 12,000 positions worldwide have already been pared under the initiative, which is aimed at streamlining and restructuring the bank’s business model.

The bank has always maintained that executive exits in prime brokerage are unrelated to a bonus pool, which is concentrated when fewer staff are paid out of it, although sources insist that the system still prevails today.

BoA-Merrill’s prime brokerage reshuffling is not limited to Asia, with New York-based Justin Fredericks, an 11-year veteran of the bank, having departed this month as head of the bank’s US capital introductions group. He has been replaced by Elizabeth Hammond, a member of BoA-Merrill’s US cap intro team who joined from Citi in 2009.

The series of changes has coincided with the appointment of Stuart Hendel as BoA-Merrill's global head of prime brokerage, based in New York. He joined in March last year from UBS, where he was global head of prime services.

In a recent interview with UK-based FTSE Global Markets magazine, Hendel’s stated plans for the global prime brokerage include 30 new strategic hires globally and the provision of value-added services for clients, such as research products.

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