Former Cowen prime brokerage executives set up new US business at INTL FCStone

The US prime brokerage market as seen a number of new entrants over the years, following an industry-wide descaling of hedge fund clients by the big banks.

By Joe Parsons

Three of Cowen Group’s most senior prime brokerage executive have joined INTL FCStone Financial to establish a new US prime services business.

Douglas Nelson and brothers Michael and Nicholas DeJarnette have all emerged at the Atlanta-based trading and clearing specialist to set up its first US prime brokerage business.

INTL FCStone, known as a commodities and FX market maker, expanded into European equities earlier this year, despite the challenges posed by MiFID II.

Nelson and the two DeJarnette brothers have worked together since 2005 at Convergex Prime Services. Nelson was the CEO of Convergex Prime Services, and when it was taken over by Cowen Group in 2017, became co-head of US prime brokerage.

Nicolas DeJarnette was previously chief operating officer of Convergex Prime Services, and Michael DeJarnette was an executive director of global clearing and prime services, before becoming co-head of US prime brokerage at Cowen.

INTL FCStone is anticipating to onboard hedge fund clients as soon as the first quarter of 2019.

The US prime brokerage market as seen a number of new entrants over the years, following an industry-wide descaling of hedge fund clients by the big banks.

Most recently, Mirae Asset Securities (USA), the US-subsidiary of Korean securities broker Mirae Asset Financial Group, launched a prime brokerage, securities lending, clearing and execution offering with the aim to capture emerging and smaller-sized hedge fund managers.

Meanwhile European banks such as Credit Suisse and Deutsche Bank, which have both significantly reduced the size of their US prime brokerage operations in a bid to reduce costs, have highlighted their ambitions for a resurgence in the business.

In addition, Cantor Fitzgerald has also made a number of key hirings to bolster its prime brokerage business, including the appointment of Jon Yalmokas in September last year from Bank of America Merrill Lynch as CEO of its prime services unit, and Emma Sugarman from hedge fund Serafima Investments as global head of capital introduction. 

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