By Michael Rosen and Jack Seibald
Jack Seibald
The mid-point of the year is a chance to review progress and set some stretch goals. In the case of Marex Prime Services, the goals are truly ambitious.
Following on from the completion of Marex’s acquisition of Cowen’s prime brokerage business in December, we believe that we are set to take a prime services business that had already developed a reputation for consistent excellence across the full spectrum of client needs up to the next level.
And from where we sit, it’s the ideal time.
Global markets, while still absorbing the once-in-a-generation shocks of the past few years, are showing renewed strength and the buy-side is eager to stake out new ground. Fund launches are picking up again, with data showing a slew of multi-strategy funds looking to take advantage of the market gyrations across asset classes that have created so many headlines.
Check out our full report ‘Prime brokerage: how funds can maximise their prime partnerships in the shifting landscape
Synergies and value creation
More to the point, we think the Marex deal is a clear win-win for clients. For Marex’s established client base in the energy, metals and other resource markets, there is the opportunity to gain access to a full set of services that will help them invest, hedge and address the entire transaction lifecycle via one provider.
They can do risk management and other pre-trade functions, execute, settle, have custody, transaction reporting and analysis, all with the support of a single firm.
And for our prime brokerage clients, there is the chance to bring in the knowledge and experience of market experts in areas we had not covered to date. Because our service model has always been about breaking down barriers rather than erecting them, we expect our prime brokerage clients will be eager to tap into the array of possibilities that are now on offer.
Ensuring seamless client service
Continuity is our top priority. But that does not mean there will not be evolution. The changes our clients see will be positive, as they will be enhancements.
That begins with us working with them to take advantage of the new market access we will have. Continental Europe, Asia, and the Middle East stand out in that respect, and Marex’s existing presence across multiple jurisdictions in these regions should facilitate access.
As you will have seen in the financial press, there is almost zero overlap in the client bases that Marex and the acquired prime brokerage business had before this deal. We plan to take advantage of that to create value.
For instance, we have hedge fund managers who focus their portfolios in the energy sector. They now have the opportunity to talk to energy specialists who trade the underlying contracts and these the flows, which will provide valuable input into their decision-making. That’s just one example. The wide array of business areas in the Marex group means there will be plenty of similar opportunities.
Mike Rosen
Full steam ahead
As we detail in our latest comprehensive analysis of the state of the prime services market, there are few companies in the sector outside of the bulge bracket providers that can offer full service, and even fewer with the track record, capabilities and service philosophy that Marex has.
Finally, it’s worth noting that when the TD Cowen prime brokerage business became part of Marex, the entire team was part of the transition.
We have always recognised that providing prime brokerage services is a team effort. And we have understood that a successful transition means that clients have complete continuity, which hinges largely on them having the same account management and support.
The global economy no doubt will have its occasional wobbles, but there is not the same sense of concern that has been hanging over it for the past couple of years.
So, for Marex prime services, it’s full steam ahead for the rest of 2024.