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By the beginning of December 2009, the prime brokerage industry was in a state of disrepair: Bear Stearns had been removed from the picture and Lehman Brothers was gone for good. Fund managers, spooked by the sinking of Lehman, rounded on the remaining industry behemoths, Morgan Stanley and Goldman Sachs, relocating large chunks of cash and securities at smaller rivals. Buffeted by redemptions and the obliteration of portfolios industry-wide, meanwhile, the hedge fund market was entering a period of prolonged evisceration.
