Prime brokers expanding but credit funds 'shoved out the door'

A year ago, banks warned of the threat Basel III posed to hedge fund strategies. After an overhaul of prime brokers, many say they now want to expand prime financing – but only to certain strategies

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Prime brokers and hedge funds are adapting to a new world

In the summer of last year, banks were warning a jump in financing rates was inevitable for certain hedge funds, in order to comply with leverage and liquidity ratios in Basel III. Since then, many have made a concerted effort to overhaul their prime brokerage units, turning away clients and lifting rates for some.

Hedge funds have been asked if they can change the composition of their portfolios to make their prime financing less balance-sheet-intensive. Small hedge funds and credit hedge funds

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