Global Macro: A Prime Broker’s Perspective

Barry Bausano

This article was first published as a chapter in Global Macro: Theory and Practice, by Risk Books.

The traditional prime brokerage model was originally designed to service the classic equity long/short hedge fund manager. Global macro strategies developed largely outside that model, and prime brokers were typically confined to supporting just the equity portion of macro portfolios. However, in response to the evolution of trading styles, increasingly globalised markets and the changing regulatory environment, over time the traditional equity prime brokerage model has evolved into a sophisticated multi-asset, multi-product prime brokerage and prime finance offering. This chapter will examine the history of these developments, the role of prime brokers in supporting global macro managers and the changing regulatory environment that will likely shape prime services and impact trading strategies for years to come.

A Bit of Personal History

This author began his career in finance in 1985, and very early on was privileged to work for three legendary global macro managers: Julian Robertson at Tiger Management, Michael Steinhardt at Steinhardt Partners and Louis Bacon at Moore Capital