The mutual fund firm Fidelity has been expanding its prime brokerage arm as the current financial crisis has battered hedge funds, The Financial Times reports.
Fidelity plans to add about 50 more clients to its existing 300. In the past month, its client accounts have risen by 20%,.
“Where previously we might have had 20 per cent of a fund’s assets, now we get 50 per cent … a big driver is counter-party risk,” Jim Coughlin, an executive at Fidelity’s capital markets services, told The Financial Times. “People are very nervous about that, and we offer a high level of security because we do not do any proprietary trading, we do not offer out our capital and we are also relatively conservative in terms of our leverage.”