Multiprime Migraine

More hedge funds are asserting their independence from their prime brokers.


Although $3 billion hedge fund firm Trafelet & Co. has used multiple prime brokers for each of its 11 underlying funds since late 2007, its main reason for doing so changed in 2008. The original rationale was that a multiprime setup would ensure that the firm got the best pricing on deals, but by the middle of last year, the big worry had become the potential for counterparty failure.

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