Prime Brokerage Predictions, AIG & St Patrick's Day

Prime Brokerage

Brad Hintz an analyst at BernsteinResearch has produced a report on Prime Brokerage and makes some unsettling predictions.  First off, Hintz expects that a quarter of hedge funds will shutter their doors within the next twelve months.  He anticipates asset values will drop by 18.2% (fairly specific estimate don’t you think?) this year.  The decline in assets under management will hit the prime brokerage business hard, and he foresees a 32% decline in revenues with profits dropping by 52%.

He feels the prime brokerage business also faces permanent changes in its relationship with the hedge fund community.  The rescue of Bear Stearns and the subsequent failure of Lehman has altered the hedgies’ view of  prime brokers and counterparty exposure has a new prominence. 

His predictions for the top Prime Brokers (in approximate rank order) in 2012 are as follows:  JP Morgan, Goldman Sachs, UBS, Morgan Stanley, Deutsche Bank, BNP Paribas, Credit Suisse, Bank of America, Barclays and Citigroup.  Given the turmoil, ructions, consolidations and takeovers in the financial community over the past year, it is a truly brave soul who names top providers three years into the future.

More on AIG

Please have a read of Paul E. Zimmerman's blog on the subject of bailed out companies and government intervention.  Feel free to pass over the kind words about me and go to the meat of his blog.  He expresses my thoughts far more eloquently than I could.  Paul covers a huge range of topics in his blog, they are interesting and well thought-out. That's why I take the time to read his blog.

Happy St Patrick's Day!

I know it's still early in the morning, but we have been partying since 12.01 and here are a few snapshots.  Yes, that is me in the snazzy green bow tie explaining the finer points of Central Counterparties to my adoring audience.  I am having some professional shots done, and this bow tie will feature in all future shots.  Click on the photos and they will pop-up in a separate box.

 

                        

Ok, so the truth is that these photos are from the recent IMN conference in Arizona. This party was sponsored and organised by eSecLending and everybody had a great time.  The dancers were fantastic, the band was fun and the drinks were  ... green.  The dance troupe are from the Bracken School of Irish Dance, the band is Round the House, and the photos are from Allyson Lewis of eSecLending.  I'm glad to see Allyson got my good side.

P.S.  Today is the Spitalfields Forum.  Don’t forget to follow the event on twitter at the following address:  www.twitter.com/dataexplorers. Interesting experiment, I hope it works.  I have been on twitter for a few days now and become a bit of an addict.