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 products.
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...