In this 16 page briefing, Finadium outlines current thinking about the business of Prime Custody including the target market and operational considerations. The appendices contain asset under management tables of US registered mutual funds that self-identify as long/short or market neutral.
Highlights from this report include:
Prime Custody is benefiting from unusually low levels of hedge fund leverage. As leverage increases, fewer hedge fund assets will need the custodial portion of Prime Custody services.
At the same time, the leveraged mutual fund industry is just beginning to grow; by January it had already outstripped our projections for all of 2010. Leveraged mutual funds will be consistently in need of Prime Custody.
By 2011, we expect the pool of assets requiring the custodial portion of Prime Custody to stabilize at about $400 billion. However, a much greater pool of assets will require other services provided under the Prime Custody label
D.C.