Dresdner Kleinwort Wasserstein (DrKW) has launched a prime brokerage business, offering financing and support services to hedge funds and alternative investment funds.Headed up by Martin Keller, the team includes Gary Francis, Andrew Brown, Jesper Bang, Simon Murray and Michael Posylkin, who all joined the bank early last year to build a proprietary system and dedicated support infrastructure for the prime brokerage business in London. The Asian business will be covered by a team of five, headed by Tim Wannenmacher, director and head of short-term products based in Japan.
The core package of services offered by DrKW's prime brokerage unit includes margin lending/portfolio financing, securities lending, custody services, account risk/margin management, execution and consolidated reporting, and cross-margining between cash equity or stock lending positions.
Despite the stranglehold of players such as Morgan Stanley and Goldman Sachs in the prime brokerage business, Keller expects that bank's strong balance sheet and financing capabilities will aid it in its ambitions to be among the top five prime brokers in the next five years. "We're competing for the top three to number five spot, not for one and two," he said.
He added that there are huge opportunities for prime brokerage in Europe, where the growth in alternative investment and hedge funds is still at the early stages. In Asia, moves by regulators in Hong Kong and Singapore to open the hedge fund market up to retail investors will also have positive implications, he said. "From an Asian perspective, it's going to make the region much more of an attractive place for funds because if you look in Europe, we have not really liberalised hedge funds to become onshore products."
The prime brokerage unit sits with other equity financing and fixed-income repo teams in the principal trading unit, reporting to Ulf Bacher and Walter Kraushaar both based in Frankfurt. The principal trading unit is placed within short-term products and treasury, headed by Eric Pohl in Frankfurt.
Keller joined the bank in March 2001 from ING Barings. Prior to ING, Keller spent seven years at UBS Warburg, where he set up bank's global prime brokerage service.
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