For those that have used their spare time to dabble in investments, there are literally hundreds of options, each involving its own risk and return quotient.
If you have a lot of money to spare, or head a large organization that is currently considering large scale investments, you might already have knowledge of a large percentage of these options.
In such a situation, if you are looking for an option that allows you to diversify your portfolio, outsource a number of your actual investment activities and concentrate more on things like investment strategy and goals, you might want to consider prime brokerage services.
While prime brokerage services are regularly offered by most of the relatively larger financial institutions that have frequent dealings with other major financial institutions, and also hedge funds, there are many who are not completely aware of the implications, scope and extent of the services provided by prime brokers.
Prime broker services are in some ways like other brokerage services, but with certain special features. Prime brokers provide a special kind of service which is somewhat exclusive to certain circles, to a group of special clients that meet their extensive qualification criteria.
Although these offer a large variety of different services, chosen clients do not absolutely have to participate in them all, but can rather pick and choose the ones they need, and can even carry out other activities through other institutions.
In addition to the core lending services they provide, prime brokers often offer hedge fund clients other services. These services are sometimes referred to as “concierge services,” and are specifically designed to ease the operation of a hedge fund.
Secondary offerings for prime broker clients, who frequently engage in financial trading, include access to their derivatives trading desks, along with suggestions that could potentially help enhance risk management. Prime brokers also typically offer their hedge fund clients private access to their own private research services, which is a key element in reducing costs for the hedge fund.
Prime brokerage involves countless crucial services to the success and enhancement of a hedge fund, which makes the selection of a prime broker an important decision. If prime brokerage services are for you, be careful in your selection of broker.
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