Capco announced its new Prime Brokerage Consulting offering to support prime brokers.

Capco is a global management and technology consultancy dedicated to financial services and energy industries. Its Prime Brokerage Consulting offering will guide prime brokers through regulatory change and data and digital transformation agendas. It will also assist on other projects such as vendor selection.

Capco: Prime brokers in throes of change

Prime brokers have faced many challenges. Crucially this year, cash equities, equity derivatives and prime brokerage (catering for hedge funds) businesses have all been in decline at the same time for the first time since 2015.

Following Deutsche Bank’s exit from the business, BNP Paribas took on its prime broking and electronic equities trading clients. The French investment bank told analysts recently that it will take more than a year for the transition of Deutsche Bank’s clients to be completed.

Prime brokers also are under pressure from credit and counterparty risk of financing hedge funds. The $180 million loss within Citi’s FX prime brokerage business in December last year spurred a new debate. Do prime brokers have adequate risk management to finance hedge funds making speculative bets?

Capco appoints Anthony Bennett

Anthony Bennett was formerly Global Head of Prime at KPMG Consulting. He brings 20 years’ experience building and managing prime brokerage platforms at leading global banks. These include Goldman Sachs, Morgan Stanley, HSBC and Société Générale Corporate & Investment Banking, where he was Managing Director, heading up prime brokerage, clearing and commodities client services globally. (as per Opalesque).

Mike Ethelston, UK Managing Partner at Capco, said: “In many respects prime brokerage represents a microcosm of the key challenges facing the wider banking industry, notably the impact of regulatory change and compliance, the evolution of operating models, and the need to reengineer internal capabilities and external around data and technology. Our new offering represents a natural extension of our existing capabilities and allows us to offer a greater degree of scale and technological prowess than is currently on offer in this space.”

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