Royal Bank of Scotland has named David Gray head of prime services and client execution for Asia-Pacific, as part of RBS’s push into the crowded and competitive market for hedge fund services in the region.
Gray was previously head of prime services in Asia-Pacific at UBS, having departed in April last year amid a shake-up of the prime broking team at the Swiss bank. It included the move of Ashley Jarvis to Morgan Stanley, who is understood to be transferring to the UK.
Under the newly created role at RBS, Gray will build a prime services unit in Asia that will integrate futures and options, prime brokerage, central counterparty clearing and a mandate sales team.
Based in Hong Kong, he reports on a regional basis to Samir Atassi, head of Asia ex-Japan markets sales, and globally to US-based Fabian Shey, global head of prime services and client execution.
RBS’s push into the Asian prime brokerage market follows similar moves by HSBC and JP Morgan, which have spent the past year building teams for their own operations.
The development at RBS is part of a broader plan globally to boost its fixed income, currency and commodities units by putting a focus on prime brokerage operations. In doing so, it aims to shore up a client base of asset management firms which would use RBS as a clearing broker, particularly for swap trades, and also for prime services lending.
However, RBS is in a position of trying to build groundswell from what is now a small client base. In Europe it is not within the top 10 prime brokers by AUM market share, by Eurekahedge figures released last week.
The same holds true for RBS in Asia, as indicated by a HedgeFund Intelligence survey last month. Gaining market share in the region will be challenging, given the rash of hedge fund closures over the past year. The closures have contributed to a reduction in industry assets, along with investor redemptions and performance losses, which have lowered total AUM to $110.9 billion as of the end of May.
Shey notes that “prime services represent a significant revenue growth opportunity in [Asia]” and is a strategic focus area for RBS’s markets and international banking business. US-based Shey, like Gray, is formerly from UBS, having joined RBS last October to set up its global prime services team.
Gray, a 17-year veteran of UBS, had been the bank’s Asia head of prime brokerage for four years. Prior to that, he had built up and headed UBS’s prime brokerage business in Australia.