Goldman’s digital hedge-fund matchmaking push boosted by lockdowns By Reuters
© Reuters. FILE PHOTO: The Goldman Sachs firm brand is seen within the firm’s house on the ground of the NYSE in New York
By Maiya Keidan
(Reuters) – Goldman Sachs’ long-planned on-line migration of some profitable prime-brokerage companies picked up steam throughout the pandemic as hedge funds and buyers working from house have been unable to fulfill in particular person, whereas different Wall Road banks are taking extra measured steps.
Final July, Goldman Sachs Group Inc (NYSE:) launched Marquee Join, providing on-line digital introduction providers for prime shoppers. Different prime brokers advised Reuters they have been additionally shifting to convey some prime dealer providers on-line, however one cautioned that shoppers could also be getting “Zoom fatigue” with hopes to renew assembly in particular person as soon as extra persons are vaccinated.
People have lengthy dealt with capital introduction providers, by which third events like banks try to matchmake buyers with hedge funds. However as giant swathes of different financial institution providers have moved to digital platforms, banks have been more and more taking a look at methods to transfer a few of these providers on-line too.
Hedge fund managers and buyers on Goldman’s Marquee Join, for instance, create profiles that allocators can use to seek for the funds that match their targets.
Over the previous 9 months, the appliance has signed up over 900 hedge funds, greater than 600 investor corporations and made 4,500-plus connections, executives in Goldman’s prime brokerage workforce advised Reuters.
“Whereas we’ve been engaged on growing Marquee Join at the side of our shoppers for a couple of years, the timing of our launch… was fortuitous,” stated Isabella Meyer, a member of the capital introduction workforce and challenge lead on Marquee Join, including that the work-from-home development accelerated utilization.
Different prime brokers advised Reuters that whereas they’d not but launched an identical product, efforts at taking a look at methods to transfer some providers on-line could also be underway.
“Jefferies (NYSE:) continues to leverage expertise to facilitate provide and demand between managers and buyers which incorporates concerns to sure functionalities being introduced on-line,” stated Leor Shapiro, Managing Director and World Head of Capital Intelligence at Jefferies.
Mike Monforth, world head of capital advisory at JP Morgan Chase (NYSE:), stated: “We’re at all times taking a look at digital options. Capital introduction is an space of focus however we might be affected person to make sure no matter resolution we ship will certainly be valued by our world shopper base.”
Citi, Barclays (LON:), Morgan Stanley (NYSE:) and Credit score Suisse (SIX:) declined to remark.
One of many key components of capital introduction matchmaking is usually conferences by which hedge funds and buyers get to fulfill nose to nose. The pandemic compelled that side on-line, drawing better participation.
Shapiro at Jefferies stated its flagship convention went from round 200 investor attendees within the earlier yr to roughly 300 throughout the pandemic.
Monforth at JP Morgan stated the financial institution final yr placed on 47 occasions with over 5,500 members in comparison with 43 occasions and 1400 members the earlier yr.
Hedge funds have raised more cash with the shift on-line, including $844 billion in capital since March 2020, with $6.1 billion in new investor money within the first quarter of 2021, in line with knowledge from Hedge Fund Analysis (HFR).
Regardless of all the advantages touted of utilizing digital instruments, prime brokers admit buyers and hedge funds are eager to get again to in-person conferences.
“There’s a little bit of Zoom fatigue,” stated Monforth at JP Morgan, including that digital conferences have been right here for the long run alongside face-to-face interactions.
Goldman Sachs’ Diana Dieckman, world head of the capital introduction workforce inside prime providers, stated: “There’re all these now instruments on the market now, however that does not substitute in-person, so it is going to be a hybrid strategy going ahead.”
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