This year’s Prime Brokerage award goes to Barclays Capital in recognition of its rapid growth, continued innovation and commitment to developing a truly multi-asset class platform.
In the past 12 months, it has doubled its cash equity volumes and grown its financing and stock lending balances by more than 50%. In the first half of this year, it added seven new markets to its synthetic coverage, bringing the total to 30, and added derivatives prime brokerage for commodities, credit products and FX.
Alasdair Hodge, head of prime services, says that its multi-asset commitment brings other benefits to BarCap and its users. “Because we built our platform to be multi-asset from the beginning, this allowed our service to be more automated. And the non-silo approach offers a much clearer picture of what clients are doing, which is better for us and for them. This is particularly important during times of market turbulence such as we are experiencing now. It offers us and our clients complete transparency and enables the better management of risk.”
A key element of BarCap’s platform is its global netting function, which nets across markets to give a single portfolio margin call that generates operational and capital efficiencies. Currently it covers FX, fixed income, credit, equity and commodities across cash, over-the-counter and exchange-traded derivatives. The challenge is to keep developing it, says Mr Hodge.
“In the past 12 months, we have added portfolio margin capabilities for CDS and TRS [total return swaps] on loans and inflation swaps, and developed several equity margin models. We also plan to extend our power and gas margin capability,” he says.
There are plenty of opportunities to continue growing the business, says Mr Hodge. “Asia’s continued growth presents huge opportunities for prime brokerage services. Funds are getting bigger and the significance of derivatives to exploit trading opportunities is ever increasing.” This presents challenges, too, he says. “The STP [straight-through processing] provision around derivatives is a big commitment, as is around-the-clock reporting and client service”
