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A series of fortunate events
After roles at Goldman Sachs , Deutsche Bank and Citi , Mark Aldoroty ’ s reputation in the industry was hardly up for debate , however Global Custodian decided to add one more achievement to the resume of Pershing ’ s prime services head by inducting him into our Hall of Fame . Here he discusses his career and the ever-changing prime brokerage industry .
consider my career an unusual combination of odd circum-
“ I stances ,” says Mark Aldoroty , head of prime services at BNY Mellon ’ s Pershing . Perhaps being modest about his entry into the financial industry , he describes his interview process at Goldman Sachs as relatively pain-free compared to the route most graduates have to take these days . “ I only had one grueling day of interviews , not like today ,” he explains . “ I was probably one of a more limited pool of candidates who could code at the time .” Whatever potential was spotted on that single day of interviews at the investment bank renowned for its scrutiny when employing new recruits has been seen again and again in a career spanning over 30-years . Not only did he accelerate through the ranks at Goldman Sachs , but he then went
“ When you look at the overall risk profile of BNY Mellon , it is a more stable environment .”
on to work for two more bulge bracket banks in senior positions , before heading up prime services at Pershing . “ As a programme application developer , I worked in operations and from there I ended up meeting different folks and moved into the controller group ,” Aldoroty explains . “ I did technology around financing , funding , treasury , etc . before being asked to build technology for the trading desk . “ We developed several different models .
I wrote the code and then had the responsibility of working with the desks to explain the funding models . Subsequently , I was asked to do something similar for clients and that ’ s how I got into prime brokerage .”
Long-term relationships From then onwards , Aldoroty has become an influential figure in the prime brokerage world , leading a number of different teams across the industry . He joined Pershing in 2014 , and it was his work there in particular that earnt him the honour of receiving the Industry Legend award at Global Custodian ’ s New York awards in November 2017 . Pershing has been on the rise since Aldoroty ’ s appointment , thus winning the Prime Brokerage Operations award at the same event . The service provider has been gradually winning business from some of the bulge bracket firms as clients are increasingly diversifying their prime brokerage providers . There is perhaps more movement among service providers today than ever before . A survey of hedge funds conducted by Preqin in 2016 found that 39 % of those who had switched a provider had changed their prime broker . This was a high percentage compared with custodians , which only 19 % had changed . Aldoroty believes Pershing ’ s risk profile and stability is helping it win new business in this environment . “ As investors place more pressure on hedge funds and 40 Acts over fees , managers have looked for ways to strengthen their own bottom line ,” he explains . “ In many cases , that means becoming more efficient with service providers , such as prime brokers or custodians .” “ One of the reasons we ’ re benefiting is because when you look at the overall risk profile of BNY Mellon , it is a more stable environment . We are not in some of the riskier businesses .
“ I like helping people in their careers and seeing them become the most effective professionals they can be .”
“ We are more additive , someone may have other prime brokers but also add Pershing to the mix . They are looking for a partner that ’ s going to be there and be stable . “ They are making economic decisions for their clients and looking at where we can create operational ease for them . That ’ s how they make the decisions of where they are going to be . And of course pricing will always come into play . “ Starting up with a new prime broker takes time and energy , so you want to make sure if you are going to do it , it will be a long-term relationship .”
Ups and downs Recent years have provided many changes to the prime brokerage world . Regulations , balance sheet costs and pressures on hedge funds from their own clients have seen a shift in the landscape . Despite those pressures , it does seem the tide may be turning for hedge funds , as launches exceeded liquidations on a quarterly basis for the first time in over two years , according to a report from HFR . This was due to improved investor
36 Global Custodian The Hedge Fund Annual 2018