The Asian hedge fund industry is experiencing a period of
rapid growth following the explosion of European hedge funds
and regulatory changes in some Asian countries. As the number
of funds grow, so do the number of service providers. Asia now
has a reasonable selection of prime brokers, offering different
areas of expertise and service.
The relationship between the prime broker and the fund
should be looked upon as a growing partnership, and as such the
manager should make a careful evaluation of each prime broker,
based upon their quality of service and value-added
All prime brokers should be able to offer custody and
clearing, financing and stock lending. In addition, a manager
should consider the provision of capital-raising services,
access to IPOs and the commitment from the prime broker firm as
a whole to the business.
It is worth spending considerable time selecting the prime
brokers. Each manager...