More hedge funds are answering their clients’ calls for long-only investments. Traditional asset managers, meanwhile, are adding long–short strategies. And investors are still jittery postcrash, even without all the role switching.
Enter, reassuringly, big global banks like Bank of New York Mellon Corp., Citigroup and JPMorgan Chase & Co. with the ultimate multipurpose product: prime brokerage integrated with global custody — prime custody. “Global prime custody offers a new service channel for multiple types of clients,” says Josh Galper, managing principal of Concord, Massachusetts–based consulting firm Finadium. His firm foresees an almost $700 billion market for the converged service.
What prime custody basically does is offer a single interface — a one-stop portal — for the multiple and disparate services involved in prime brokerage and custody. “It makes complete sense, and our bank is in a position to offer it,” says Devon George-Eghdami, head of JPMorgan’s prime custody group. The bank’s acquisition of Bear Stearns Cos. gave it a suitable technology platform. ....