Nomura started its first US prime brokerage office last year, with a handful of key members of staff transplanted from Europe. The headcount now stands at 19, but the bank is believed to have plans to increase this to 40 by the end of 2010, as it builds out the business’s capabilities in stages.

More than a year after the demise of Bear Stearns’s and Lehman’s prime brokerage units – and despite their respective acquisitions by JP Morgan and BarCap – the US market is still thought to have the capacity for new entrants. “Their [Lehman and Bear Stearns] footprint has still yet to be filled,” one manager told HFMWeek. “There is still room for new business.”

Newedge, the prime brokerage owned by French banks Societe Generale and Credit Agricole, is also looking to expand its US presence, telling HFMWeek that it will place a greater emphasis on the country’s hedge fund managers this year.  

“We [Newedge] are already present in the US, but, it is an area that we are looking to further develop by offering our multi-asset, multi-instrument platform to US-based managers trading both domestically and globally,” said the firm’s head of capital introduction, Duncan Crawford.

Firms, like Newedge and Nomura, that are capable of providing services to strategies outside the long/short equity space are thought to be particularly well positioned. John Godden, of hedge fund consultancy IGS, believes an enlarged Newedge will leverage its expertise within the CTA space to pick up new clients.

“Their expertise within this area will prove attractive,” he said. “They are also in a fortunate position where they don’t have to do rehypothecation and are backed by two French banks.”

Nomura is already offering a listed derivative prime brokerage service and plans to develop its quantitative, cash and synthetic capabilities over the course of this year, as it builds up a full prime brokerage offering.

The expansion plans of both businesses will face competition from a spate of recently launched mini-prime brokers (see analysis, p18), a sector that has grown as more hedge funds look to develop multiple prime broker relations.

Nomura, which acquired the Asian and European operations of the stricken Lehman Brothers in September 2009, believes it can win new clients via its Asian presence, and by providing unique access to the Japanese markets.

The bank will also roll out a new product that offers clients the opportunity to move assets into a number of segregated accounts depending on the levels of security, financing and rehypothecation they require.