Prime Brokerage Essay

2044 words - 8 pages

Abstract

Prime Brokerage is an independent business group that is owned by UBS. PB has been acquired in early 2006 and fully taken over by UBS in early 2007. The idea of the business is a one stop shop for hedge funds. When hedge fund becomes a client of PB they are provided everything they need to fully function and all they have to do is use UBS as the trading platform and pay a fee for each trade. Prime Brokerage will take care of everything else from leasing the space obtaining the furniture and the equipment, managing the infrastructure (voice, data, and external market data), and proving additional services if required like legal and accounting.
However the PB group is facing a lot challenges. The group has a horrific employee retention issue. On average the employee in a non management position leaves PB after 12 mounts of employment. Aging infrastructure and none existent standards causes a lot of clashes between the IT and Business. Projects are not delivered on time and Business is disappointed with the results. Changing compliance laws and new rules and regulations are threatening the future success of the PB group and razing questions of liquidation of the business completely.

Business AS-IS

UBS Prime Brokerage Services is a powerful conduit of UBS’s global capabilities. They offer top-tier services tailored to the exact requirements, and designed to optimize opportunity and minimize risk. Working with the client as your ‘prime partners’ Prime Brokerage is committed to delivering the benefits of the entire organization to help the clients business succeed. Prime Brokerage offer global clearing, custody, flexible financing solutions, full accounting support, plus access to their foreign exchange and fixed income platforms.
Prime Brokerage service provides timely settlement and clearing of securities and cash balances for all transactions in more than 60 markets – in any time-zone and all major currencies, whether the client have executed the transaction through Prime Brokerage or with a third party. Through dedicated Prime Brokerage account manager, the client have access to a full range of operational solutions and financing options allowing to operate all over the world, seven days a week.

IT AS-IS

Prime Brokerage IT infrastructure is very complicated spanning from desktop to servers, network to voice, internal and external market data partners distributed in 5 datacenters in two key regions. The entire infrastructure is managed in house so there is a good knowledge and skill level available to troubleshoot patch and deploy. It addition a proprietary Web Platform is used that allowing clients to perform all there desired actions from one secure location. Leveraging UBS as a size of the client Prime Brokerage is able to negotiate low cost contracts that deal with external venders and partners lowing the cost for itself and passing this saving to the clients.

SWOT

Some of the strengths that Prime Brokerage...

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