Wells Fargo new product about to hit the market
18 June 2014 New York
Image: Shutterstock
Wells Fargo Securities will launch a self-clearing prime brokerage product for its hedge fund clients by the end of June.
The new product, which has been in the planning since Wells Fargo bought San Francisco- and New York-based prime brokerage services and technology provider Merlin Securities in April 2012, is awaiting regulatory sign-off.
Head of prime services Eamon McCooey will be in charge of the prime brokerage team, which consists of approximately 70 front-office personnel across sales, trading, capital introduction, relationship management, product development, transition/onboarding, and client services.
Wells Fargo has also brought in additional personnel within legal, risk, compliance, securities lending, operations and information technology to service the new product offering. “Significant resources have been allocated to the product build out for the past 18 months,” commented McCooey in an interview.
“The self-clearing product allows us to offer our direct product capabilities and balance sheet directly to clients and complements our existing market leading Introducing Broker product which Wells Fargo acquired through the Merlin acquisition. This will now allow us to service a broad spectrum of clients from emerging managers to large institutional hedge funds.”
The self-clearing prime brokerage product will initially be focused as a prime brokerage offering within a US broker-dealer structure and adhering to regulatory margin rules.
“Initially, we will be offering prime brokerage services for US-based assets but we anticipate having non-dollar capabilities by year end,” said McCooey. “The asset classes that we will offer prime brokerage services (clearing, margining, securities lending) will include equities, listed options, convertibles, corporate and other DTCC-eligible asset classes.”
McCooey added that Wells Fargo is in “the early stages of a long term build out of [the] platform” that will allow it to extend product capabilities and client segments “to an even larger group of funds than … targeted day one clients”.
“We are looking to partner with key clients who will be instrumental in helping define our future product capabilities.”
“We believe that, given the impending bank capital rules that may lead to funding constraints in the prime brokerage market, Wells Fargo is in a unique situation given its balance sheet/liquidity profile and safety of assets to form core strategic relationships within the alternative investment market segment.”
The new product, which has been in the planning since Wells Fargo bought San Francisco- and New York-based prime brokerage services and technology provider Merlin Securities in April 2012, is awaiting regulatory sign-off.
Head of prime services Eamon McCooey will be in charge of the prime brokerage team, which consists of approximately 70 front-office personnel across sales, trading, capital introduction, relationship management, product development, transition/onboarding, and client services.
Wells Fargo has also brought in additional personnel within legal, risk, compliance, securities lending, operations and information technology to service the new product offering. “Significant resources have been allocated to the product build out for the past 18 months,” commented McCooey in an interview.
“The self-clearing product allows us to offer our direct product capabilities and balance sheet directly to clients and complements our existing market leading Introducing Broker product which Wells Fargo acquired through the Merlin acquisition. This will now allow us to service a broad spectrum of clients from emerging managers to large institutional hedge funds.”
The self-clearing prime brokerage product will initially be focused as a prime brokerage offering within a US broker-dealer structure and adhering to regulatory margin rules.
“Initially, we will be offering prime brokerage services for US-based assets but we anticipate having non-dollar capabilities by year end,” said McCooey. “The asset classes that we will offer prime brokerage services (clearing, margining, securities lending) will include equities, listed options, convertibles, corporate and other DTCC-eligible asset classes.”
McCooey added that Wells Fargo is in “the early stages of a long term build out of [the] platform” that will allow it to extend product capabilities and client segments “to an even larger group of funds than … targeted day one clients”.
“We are looking to partner with key clients who will be instrumental in helping define our future product capabilities.”
“We believe that, given the impending bank capital rules that may lead to funding constraints in the prime brokerage market, Wells Fargo is in a unique situation given its balance sheet/liquidity profile and safety of assets to form core strategic relationships within the alternative investment market segment.”
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