Prime Services in APAC: “The difficult fundraising environment is a massive challenge”

June 11, 2024

This article was originally published on hedgefundsclub.com

Ortwin Gierhake, Director of Marex Prime Services, talks with the Hedge Funds Club about Marex’s acquisition of Cowen’s prime brokerage and outsourced trading services, the challenging fundraising environment, the war for talent and much more.

You have recently joined Marex but you are not new to the industry.

I have worked in Asia in the financial markets for over 25 years and have been based in Hong Kong since 2010. Before Hong Kong, I worked in Tokyo for ten years. I joined Cowen’s prime brokerage and outsourced trading team in 2018 to open their Hong Kong office, having previously held senior management roles at WestLB, Goldman Sachs and Nomura. I am now a Director of Marex Prime Services, following Marex’s acquisition of Cowen’s prime brokerage and outsourced trading business in December 2023. I have spent most of my career working with hedge funds of all sizes in the region and across multiple asset classes.

What can you tell us about Marex Prime Services?

Marex Prime Services is the former Cowen prime brokerage and outsourced trading business, including the entire team, trading and reporting systems, clearing counterparties and legal agreements. Being part of Marex – a diversified global financial services platform – means that we now have more resources available to work with funds across a wider spectrum to help them succeed and innovate. Marex has a large global footprint, which also means that we have the ability and opportunity to enter new markets and jurisdictions, particularly in Asia and the Middle East. As a leading full-service institutional prime broker, we have a strong track record in supporting both emerging and established funds seeking to work with a single partner or to diversify their prime brokerage counterparties. We stand out in the market for the breadth of our offering and our high levels of service for clients of all sizes and are widely known for the depth of our trading capabilities and global multi-asset class expertise. We support clients in raising capital, growing their business and managing risk at every stage of their journey. Our services include high and low-touch execution, financing, outsourced trading, operational support and capital introduction. The integration with Marex gives our clients access to so much more beyond prime services and outsourced trading. Marex has over 35 offices globally including a very well-established footprint in Asia. It is one of the ten largest futures commission merchants in the US and has a top ten market share on some of the largest exchanges globally. Additionally, Marex Group has an investment grade rating of BBB- (outlook stable) and BBB from Fitch and S&P respectively.

What do you see are the biggest issues facing funds in the region?

The difficult fundraising environment is a massive challenge – particularly for emerging managers – especially if they are hovering around their breakeven point. The negative outlook on China by allocators has not helped this situation. The revenue pressure is compounded by cost pressures on the system and regulatory front. In this environment, the war for front and back-office talent is real. Outsourcing of certain functions seems to be a solution, yet implementation can be easier said than done. Another challenge facing funds is how best to implement growth strategies and add new revenue streams in a cost-effective, efficient and scalable way.

How is Marex Prime Services best placed to help?

We understand buy-side clients’ needs and how to help them to grow and become more profitable. In terms of prime brokerage services, we offer bulge-bracket capabilities with the focus on exemplary service that you would expect from a boutique firm. Our outsourced trading services are increasingly in demand. Importantly, they look and feel as if they are performed by the client’s organisation and provide a high-calibre institutional offering. Firms can fully outsource their trading desk or supplement existing operations to access new asset classes, markets or liquidity sources, trade with global market coverage; reinforce day-to-day execution capabilities; and leverage alternative execution models. I will be attending the Hedge Funds Club events in Hong Kong and Sydney and look forward to talking to fund managers about their specific requirements.

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