Prime Rate Capital Management LLP will be launched after completing FSA registration.
Headquartered in London, Prime Rate was founded by Chris Oulton in a joint venture with Matrix Group.
Following the recent decision by the FSA to allow QMMFs in the UK regulatory regime, Prime Rate plans to offer the first such UK domiciled AAA rated fund.
The recent credit crunch has focused investors’ minds on the need for secure, diversified and transparent investments. A specialised and independent liquidity fund manager is particularly well placed to meet these requirements.
Since July of this year alone, there has been an increase in QMMFs’ assets in Europe of over US$60bn, demonstrating the credibility of and institutional preference for the product in periods of turbulent market conditions.
There have also been recent changes in regulation including the implementation of Basel II, MiFID and the inclusion of liquidity funds in banks’ and building societies’ 0-8 day liquidity regime. These changes have resulted in qualifying liquidity funds becoming a money market instrument in their own right rather than simply an investment in a mutual fund.
Prime Rate has an unmatched concentration of liquidity management expertise in its senior management team. The founders have extensive experience both in liquidity funds and in bank Treasury management. Chris Oulton is a founding member and now deputy chairman of IMMFA, the trade association that introduced a Code of Practice for the money market industry.
Prime Rate is in the book building process and is planning to launch the first funds within the next three month. Primary targets are cash aggregators, including banks and building societies, custodians, prime brokers, pension funds and financial intermediaries who seek a flexible and low cost cash management solution that combines their need for security, instant liquidity, transparency and competitive returns.
“We firmly believe that the current market turmoil provides an appropriate background to launch a specialist, independent liquidity management company. It is no coincidence that the growth in the US liquidity fund industry followed similar credit events in the 1980s and we are seeing clear evidence that the perception of security and access is now the top priority for both institutions and the retail sector. Prime Rate’s concentrated cash management expertise and independence will provide a compelling proposition to the market,” says Chris Oulton, founder and CEO, Prime Rate.
“Separate from the current market background, recent regulatory changes have provided both the banking and investment sectors with new responsibilities and opportunities. The definition of QMMFs as eligible instruments will encourage their greater use within the banking sector as a whole; and as a result of MiFID the QMMF is now a permitted product for client monies which demonstrates a high degree of transparency and best practice towards client dealings; they will be a natural benefit to intermediaries and aggregators. The uniqueness of our independence, to this sector in particular, will be of obvious value,” adds Henry Buckmaster, head of sales.