Barclays merges FX/FI prime brokerage

Barclays Capital, the investment banking arm of the UK’s Barclays Bank, will complete the merger of its foreign exchange and fixed-income prime brokerage businesses by the end of March.

The new set-up should prove more efficient for both customers and for the bank, said Barclays Capital’s New York-based global head of collateralised finance, Kevin Mirabile. Customers should see advantages from a multi-asset service, including the capability to operate a simple risk limit across all products cleared or executed with the bank, while Barclays Capital’s costs should fall.

Under the new model, costs incurred by client reporting, account management, advertising, conference attendance and other areas can be shared across products. Previously Barclays Capital’s standalone foreign exchange prime brokerage unit had just ‘a handful’ of clients, said Mirabile, and costs had to be fully funded by forex flows and ticket fees.

Integrating the prime brokerage businesses started in Q4 2002, and is part of the bank’s global build-up in institutional sales. This began with the hire of Lehman Brothers’ Ivan Ritossa as global head of foreign exchange early last year, Mirabile said.

Al Smith and Steven Winter, directors in the fixed-income prime brokerage and futures clearing business in London and New York respectively, oversee the FX prime brokerage units.

The FX coverage adds to fixed-income prime brokerage units in London and New York, established late last year, which trade corporate and government bonds and their related derivatives.

The units sit with the bank’s equity prime brokerage and futures clearing businesses. Barclays Capital is also evaluating the further extension of its prime brokerage platform to include energy and other commodities.

Its prime brokerage services target hedge funds with around $100 million under management in more than five portfolio areas.