07/10/2009 Author: Shannon Hawthorne

HSBC prime brokerage focus shifts to Asia

HSBC Prime Services, the bank’s recently launched prime brokerage unit, is to adopt an Asia-Pacific focus in a bid to capitalise on the region’s growing importance as a hedge fund centre, HFMWeek has learned.

The new unit, which was formed in July as a partnership between HSBC’s global markets and securities services units, is hoping to establish a position as a leading prime services business in the Asia-Pacific region, as it increasingly becomes the focus for fund launches and hedge fund activity.

Total assets in the Asian hedge fund market increased by $3.2bn , to $68.2bn, in Q2 2009, according to recent data compiled by Hedge Fund Research. With the region spearheading the global economic recovery, the area is also anticipated to host new offices of many of the globe’s largest funds.  

HSBC’s prime services model will offer funds similar services to those traditionally offered by prime brokers, but will adopt a more conservative approach, Cian Burke, head of Prime Services, told HFMWeek. Describing HSBC as “an emerging markets bank”, he explained: “Clients will continue to have access to many of the important parts of the traditional model but with their assets in segregated accounts and without automatic rehypothecation.”

The move is a further indication of the bank’s gradual shift away from the West and towards the Asian market. Last month it was revealed that Michael Geoghegan, chief executive of HSBC, will relocate from the bank’s London headquarters to Hong Kong.