In order to keep its footing as one of the three largest global prime brokers, Bear Stearns has plucked staff from rivals Morgan Stanley, Banc of America Securities and UBS, the Financial News reports.
Douglas Stern, previously of Morgan Stanley, was named senior managing director to oversee the prime brokerage sales team which will shepherd the bank’s largest hedge fund relationships. Joseph Aurilio, previously of UBS, was appointed managing director on the team. Ted Post, previously of Banc of America Securities, was hired as an associate director to target new business development.
Earlier this year, Leonard Feder, the co-head of Bear’s prime brokerage business, departed after a couple of months. His predecessor, Jeff Dorman, moved to Deutsche Bank in February where he became global head of prime finance in North America. In April, Bear added Paul Brannan as head of European prime brokerage, and Andrew Jamieson as head of equity finance.
Bear Stearns’ experienced rough times earlier this year when hedge fund clients in August removed up to $50 billion of the assets they had financed through the bank, transferring it to banks with bigger balance sheets and better credit ratings. Two of Bear Stearns’ hedge funds collapsed in June
“Some prime brokerage clients did remove balances at the beginning of August at the height of the market crisis but the situation has stabilized and we are in active discussions with clients about bringing this business back,” Sam Molinaro, Bear Stearns chief financial officer, said this month.
Bear, along with Morgan Stanley and Goldman Sachs, are viewed as the three global leaders in a competitive sector. Prime brokerage fees brought in an estimated $8 billion of revenues for investment banks last year, according to a report published by Dresdner Kleinwort in February.