Jack Seibald
Co-head of prime services and outsourced trading, Marex
After several ‘one thing after another’ years, the prime brokerage industry is reclaiming its strength, as highlighted in the recent Global Custodian 2024 Prime Brokerage Survey.
The survey, which assesses service standards across the industry, saw a 15% increase in client participation from last year – reflecting growth across the sector and its diverse range of providers.
According to Global Custodian, the feedback was “overwhelmingly positive,” with ratings improving across the board despite the challenging market conditions.
This ability to perform and excel in such a dynamic landscape points to the sector’s resilience and adaptability, signalling a promising outlook for prime brokerage. Jack Seibald, co-head of prime services and outsourced trading at Marex, offers his insights on the report’s key takeaways.
A new dawn for prime brokerage
Prime brokerage is finally enjoying tailwinds. Particularly sensitive to the trends across the industry, a wave of new hedge fund launches, increased fund allocations and improving investor returns point to renewed demand.
I shared my observations with Global Custodian:
“Year-to-date, we’re seeing for the first time in many years a notable uptick in new fund launches and spin-offs from larger firms.There have been more multi-billion-dollar launches in the last 12 months than in the preceding several years.”
This growth is attracting institutional allocators eager to capitalise on hedge fund opportunities. Multi-strategy funds in particular, have become a focal point for growth, as their sophisticated needs require tailored services – an area where Marex is strongly positioned.
Prime brokers are increasingly expected to offer holistic services tailored to meet complex, cross-asset requirements, including advisory, capital and execution.
Related Insight: Global Custodian’s findings echo those in our own recent report with AIMA: Standing Strong: Emerging Manager Survey 2024.
Positioned for success
As a leading mid-tier prime broker, Marex is leveraging opportunities in segments traditionally dominated by bulge bracket firms. I shared with Global Custodian,
This has created an ongoing opportunity for mid-tier prime brokers, particularly those with broad asset class and geographical capabilities comparable to those of the bulge bracket banks.”
“Emerging and mid-sized managers continue to be, for the most part, ignored by the bulge bracket prime brokers.
With larger players scaling back their focus on emerging and mid-sized managers, Marex is stepping in to provide specialised services support a broad range of strategies and asset classes.
Marex’s performance in the 2024 survey
In this year’s survey, we returned under the Marex brand and were one of only five firms – and the only non-bulge bracket firm – to participate consistently since 2012. We outperformed the survey average and excelled in 11 of 13 categories, demonstrating year-over-year (2023 versus 2024) improvement in nine.
Global Custodian praised this accomplishment, noting that “to log such a strong score in a transition year is an accomplishment which should not be understated.” Our commitment to continuity has been vital in maintaining high standards of client service.
Client feedback highlighted our excellence in areas like operations, trading and execution, with clients commenting on the consistent, high-quality service they’ve experienced over the years.
Our outsourced trading desk was frequently commended for its efficiency, while our expertise in listed derivatives helps clients reduce slippage and improve returns.
This positive feedback underscores Marex’s high-touch approach and reinforces our dedication to meeting client needs efficiently and effectively.
Opportunities ahead
In response to client demand and industry growth, we are expanding our geographic reach across Europe, APAC, and the Middle East. With enhanced capabilities in commodities, futures, and derivatives, our prime services team is well-positioned to provide comprehensive, multi-asset solutions.
As I noted,
“We’re exploring new opportunities in segments where Marex has an established presence, but where our prime brokerage business had limited exposure.”
This alignment with Marex’s broader strengths highlights our ability to provide comprehensive, tailored solutions – supporting funds seeking diversified and sophisticated prime services.
Marex’s competitive edge
As the prime brokerage industry evolves, Marex’s focus on high-touch client service, diverse asset class offerings and global reach set us apart.
Unlike many larger firms, Marex is structured to meet the complex demands of emerging and mid-sized hedge funds, supporting their growth with a consultative approach and long-term relationships.
While challenges like rising capital requirements and regulatory pressures remain, Marex’s strategy centres on resilience and adaptability—essential traits in a competitive market.
As the industry enters a new growth phase, we remain committed to strengthening our position as a trusted partner for hedge funds and family offices.