Cantor Fitzgerald & Co. has acquired PCS Dunbar Securities, a mini prime broker, in an expansion of the Cantor Fitzgerald Prime Services business the company launched in 2009.
PCS Dunbar Securities, headquartered in Purchase, New York, will continue to operate but under the Cantor Fitzgerald name, and its management team will join the Cantor Fitzgerald Prime Services group.
Mini primes opened en masse throughout the financial crisis, when major prime brokers dropped their smaller clients in favor of the biggest and most lucrative hedge fund clients. But a “shake out” is occurring now in the mini prime space, with some of the small players exiting the market and others consolidating. A handful of mid-tier primes, such as Merlin Securities and Jeffries, have also carved a niche for themselves.
The deal marks an important step for our business and Cantor as we continue to increase our client base, says Noel Kimmel, senior managing director and global head of Cantor Prime Services. We are very pleased to have the PCS Dunbar team joining our platform, as they have a long and impressive track record of building customer relationships and share our focus on delivering a superior, custom- tailored client service experience. As the Prime Brokerage landscape continues to evolve, we think that further consolidation is likely and Cantor is uniquely positioned to benefit from those trends.
Harry Freda, formerly the CEO of PCS Dunbar Securities, will become a managing director at Cantor. We are thrilled to join Cantors team and are very enthusiastic about offering our clients a more robust Prime Services platform along with the broader capabilities of a global investment bank, Freda says. Cantor Prime Services significant investment in technology accompanied by their client service focus has proven to be vital in landing some high profile clients.
Cantor Fitzgerald says it intends to grow its fixed income, equity and investment banking businesses.