The collapse of Lehman Brothers, whose prime broking clients found their assets had been ‘rehypothecated’ into oblivion, has not only encouraged prime brokers to introduce rehypothecation ‘caps’, it has allowed custodians to capitalise on long/short funds’ fear for the safety of assets held with their prime broker, next week’s Investment Administration Conference in Sydney will hear.
A prime broking panel at the Conference will hear from Martin Carpenter, the director of Citi Global Transaction Services, whose group has introduced a ‘prime custody’ service for hedge fund investors who want the security of their unencumbered assets being kept in a segregated account, with a custodian’s level of security placed around it.
Alongside him will be Daniel McNicholas, a director and Asia-Pacific head of prime broking for Merrill Lynch, who will argue the continued relevance of prime broking – even for the 130:30 funds beginning to think they don’t need one – and will comment on the tighter funding environment faced by hedge funds.
The head of investment operations at Colonial First State, John Paull, will be on hand to give the asset owner’s perspective, as the Colonial FirstChoice platform is a significant investor in hedge funds.
The Investment Administration Conference will be held from 9am on Tuesday, February 23 at the Sofitel Wentworth, Sydney.