When Prime Brokers Fail: The Unheeded Risk to Hedge Funds, Banks, and the Financial Industry: 92 (Bloomberg) - Tapa dura

Acerca del autor

J. S. AIKMAN is a management consultant and lawyer advising managers and financial institutions. He also lectures on hedge funds and investment banking at the University of Toronto. Previously VP and counsel for a bulge-bracket investment bank in London, Aikman has broad international experience in alternative investments and has served as adviser to many successful entrepreneurial ventures. Aikman completed his MBA at Oxford University. He may be reached at ja@jsaikman.com.

De la contraportada

Managing New Risk in a New World

"Whether you have been in the business for twenty years or are just interested in how the machine really works, Aikman's book is a must-have."
—STEPHEN BURNS, Director of Electronic Equity Trading, Wellington West Capital Markets

The collapse and sale of Bear Stearns in 2008 marked the beginning of a series of failures of financial institutions in what was to be the worst financial crisis since the Great Depression. Only a few months later came the bankruptcy of Lehman Brothers.

Prime brokerages attached to each of these investment banks were caught in a difficult position as clients—mostly hedge funds and institutional firms—attempted to withdraw and reclaim any assets stored at the failing firms. Many were unable to do so, and while assets were held in abeyance during bankruptcy proceedings, hedge funds struggled to manage increasingly risky and overleveraged bets with less liquid capital.

Before the crisis, both regulators and market participants disregarded the complex and dangerous nature of the relationship between prime brokers (the banks) and their clients (the funds). In When Prime Brokers Fail, J. S. Aikman examines the convoluted structure of this relationship, the main participants, and the impact of the near collapse of prime brokerages on the financial world. He also covers new ways to manage an inherently risky business, the structural adjustments firms will need to make to avoid similar disasters, and the inevitable regulation.

De la solapa interior

Managing New Risk in a New World

"Whether you have been in the business for twenty years or arejust interested in how the machine really works, Aikman's book is amust-have."
—Stephen Burns, Director of Electronic Equity Trading,Wellington West Capital Markets

The collapse and sale of Bear Stearns in 2008 marked thebeginning of a series of failures of financial institutions in whatwas to be the worst financial crisis since the Great Depression.Only a few months later came the bankruptcy of Lehman Brothers.

Prime brokerages attached to each of these investment banks werecaught in a difficult position as clients—mostly hedge fundsand institutional firms—attempted to withdraw and reclaim anyassets stored at the failing firms. Many were unable to do so, andwhile assets were held in abeyance during bankruptcy proceedings,hedge funds struggled to manage increasingly risky andoverleveraged bets with less liquid capital.

Before the crisis, both regulators and market participantsdisregarded the complex and dangerous nature of the relationshipbetween prime brokers (the banks) and their clients (the funds). InWhen Prime Brokers Fail, J. S. Aikman examines theconvoluted structure of this relationship, the main participants,and the impact of the near collapse of prime brokerages on thefinancial world. He also covers new ways to manage an inherentlyrisky business, the structural adjustments firms will need to maketo avoid similar disasters, and the inevitable regulation.