Things could be on the up for prime brokers. According to a Bloomberg report, Credit Suisse is looking to expand its prime brokerage coverage and headcount in Japan on the back of expectations that hedge fund revenue is set to rebound.
But it isn’t only the Swiss who have designs on cashing in on a recovery. Kevin Naylor, team manager of the financial services division at Wall Street Associates, says there are other European firms with limited market share in this area who are looking to expand.
“As a result, we may see a bit of a premium put on talent in these areas, which may draw good people from the top players in the market, especially for firms that can offer a better work-life balance and less pressure overall,” says Naylor.
Paul Guevara, a senior consultant at recruitment firm Boyd and Moore, says other firms are already getting active in the prime brokerage market.
“We have certainly seen a number of other firms that have made senior level prime brokerage hires in the last three to six months. Typically those can be characterised as firms making replacements on normal cyclical attrition, or firms which are building (or rebuilding) a business which got hit hard after the Lehman Shock,” he says.
Good news, but there could be a downside: a lack of talent in Tokyo.
“There is definitely a dearth of talent across the spectrum in the Japan prime brokerage space. Typically what we have seen is that most firms will turn the entire the market over, ‘selectively’ searching for the best candidate. But in a lot of cases they just end up transferring someone internally from overseas,” says Guevara.