Confident HSBC expands prime services team in Asia-Pacific

Three more directors hired as bank pushes hedge fund servicesin Asia-Pacific region

PUBLISHED : Wednesday, 05 September, 2012, 12:00am
UPDATED : Wednesday, 05 September, 2012, 8:25am

HSBC Holdings, Europe's largest bank, hired three directors for its Asia-Pacific prime services team in the past two months, undeterred by a shrinking market hit by the European debt crisis and global economic slowdown.

The new hires brought the size of the team to 40. The bank is angling to "be comfortably inside the top 10" prime brokers in the region in the next six to 12 months, according to Melvyn Ford, the Asia-Pacific head of the business since May.

Asian hedge fund assets fell 9 per cent to US$137 billion in the past year, with many managers struggling to perform and some choosing to close, according to a survey by trade journal AsiaHedge. Other US and European banks have become more selective in hiring and taking on clients under their own capital constraints.

HSBC hired Jean-Paul Linschoten, from UBS, and Adrian Harrison, the former head of investor relations at hedge fund Keywise Capital Management (HK), as directors of prime services sales.

David Streatfield joined from Deutsche Bank as a director of equity finance delta one sales at the London-based bank.

Delta one services allow hedge funds to invest in markets of certain assets through derivatives that replicate the performances of those assets.

Goldman Sachs and Morgan Stanley retained the lead in Asia's prime brokerage market, according to the survey by London-based AsiaHedge. The two companies controlled 27 per cent of the number of hedge fund mandates and about 29 per cent of regional industry assets.

HSBC has been for many years leader of the Asian hedge fund administration market, according to AsiaHedge. HSBC had signed up only six Asian funds as a prime broker by the time of the survey came out in May. AsiaHedge said it would probably secure more in the coming year.

The bank has provided services such as investment valuation, investor and support services for hedge funds as an administrator and custodian. Prime brokers clear trades for hedge funds, lend them cash and securities and link them up with potential investors.

HSBC has built its global prime services team in the past two years, answering client demand for counterparty with global reach and as part of the push to beef up its equities business.