[ S U R V E Y
Credit Suisse
H
|
P R I M E
B R O K E R A G E ]
Weighted
average
scores
2016
5.32
2016
2017
2018
5.6 and product development,
5.32
5.6 exhibit
5.39
also
symptoms
igh profile departures and conspicuous restructuring have 2017 as consulting
2018 of a withering-away.
5.39
Unsurprisingly, respondents are cautious
made for a difficult year at Credit Suisse, though uncertain-
profile
for now
about giving more business to Credit Suisse or urging
ty over the future of the business has clouded client perceptions Respondent
fund
to 42%
do so.
for years. Roles were first moved to Dublin as long ago as 2015, Small others
and the allocation of balance sheet to prime services has been managers
9%
Medium-
under pressure since 2014. The Weighted
limited number of responses and
48%
sized fund
the relatively disappointing scores
reflect the challenge of man- managers
average
42%
scores
aging clients and staff through prolonged
uncertainty. “Strong Large fund
9%
5.32
2016
2017
2018
people in NY office compensate 2016
for weaker coverage
elsewhere,”
managers
48%
PROFILE OF RESPONDENTS
2017
5.6
5.32
5.6
5.39
is how one client describes his operational
interactions
with Americas
50%
Credit Suisse. There is no doubt 2018
that the bank 5.39
remains commit- Europe and
18%
Respondent
profile
ted to the prime services business, albeit with
a reduced list of Middle East
By
size
By location
Small fund
32%
target clients and in closer alignment
with its 42%
equities franchise. Asia
managers
But the drive to lift the profitability of the business is bound to
9%
Medium-
Weighted average
scores by service area
affect the quality of relationships
with
48% that remain.
sized
fund the clients
32%
Americas
Large
“Credit Suisse is outsourcing their
operations and client rela-
managers
Weighted 42% +/- the
Europe and
50%
tionship to India,” notes one. “This
Large will
fund help bring down their Service area
average
global Medium
9%
Middle East
bottom-line. However, with the managers
new and inexperienced team,
Small
48%
score
average
Asia
Americas
50%
the quality of service is affected.”
The score for
client service is Capital
18%
and by engaging with us,” introduction
4.15
-22.8%
not high. “The PB reps can do a Europe
lot more
18%
Middle
East
writes one client. Though the score
for
sales and marketing is s
Asia Suisse, the
32%
the highest of any earned by Credit
detail shows that Client
5.3
-11.9%
clients appreciate steadiness and transparency in pricing more service
Weighted average scores by service area
Consulting
5.86
0.0%
than the level of commitment to them as favoured and profitable
32%
Weighted
average
Operations
5.44 scores -8.9%
clients. Though the score for risk management
is robust,
Weighted
+/- one
the cli-
Technology
5.01
-10.6%
2016
2017
2018
50%
ent does note of the margin rates
he sees
“good commercial
Service
area that
average
global
5.60
5.39
risk staff are hamstrung by platform/tech weaknesses.”
score
average Product 5.32
4.85
-11.2%
development 18%
Where the firm does continue Capital
to shine is in its derivatives fran-
4.15 listed -22.8%
introduction
chise, collecting high scores in OTC
clearing and
deriva-
s
tives in particular, though the pressure
on the bank to increase Risk Weighted average
5.62 scores by
0.9%
service area
Client the detailed scoring of its management
its profitability is evident throughout
5.3
-11.9%
Service
area
Weighted average +/- the global
service
Asset safety
5.24
-8.8%
swaps and clearing services. The
scoring of the foreign ex-
score
average
Consulting
5.86
0.0%
Sales and
change prime brokerage business, which came under managerial
6.06
-1.2%
Operations
5.44
-8.9%
Capital
introductions
4.15
-22.8%
pressure to perform three years ago, provides further evidence marketing
Technology
5.01
-10.6%
and service
5.30
-11.9%
that managers have noticed Credit Suisse needs wider margins. Trading Client
5.55
-5.2%
execution
Product
Likewise, at first sight the low score for asset 4.85
safety is puzzling.
Consulting
5.86
0.0%
-11.2%
development has remained the
Since the financial crisis, creditworthiness
Operations
5.44
-8.9%
principal reason for appointing Credit Suisse as prime broker,
Risk
Technology
5.01
-10.6%
and especially as a back-up prime broker. But 5.62
the details 0.9%
show
management
that the concern of clients is not so much that assets will be at
Product development
4.85
-11.2%
safety to finance.
5.24
-8.8%
risk; it is that they will be more Asset
expensive
Risk management
5.62
0.9%
Sales and
The equally counter-intuitive score
for capital
6.06 introductions
-1.2%
Asset safety
5.24
-8.8%
marketing
is easier to explain. Given the size
and strength of the private
Trading and
Sales
and
marketing
6.06
-1.2%
5.55
-5.2% the
banking and wealth management businesses at
Credit Suisse,
execution
bank ought to be impressing even its more selective client list
Trading and execution
5.55
-5.2%
with its capital-raising capabilities. But capital introductions is
Delta 1, swaps and financing
5.13
-10.3%
one sphere manifestly affected by staff turnover. “There is often
Stock borrowing and lending
5.68
-4.8%
change of people in the Credit Suisse capital introduction team,”
Foreign
exchange
prime
brokerage
5.41
-4.6%
is what one client has noticed. As always, however, clients that
raised money are more than pleased. One respondent name-
Fixed income
5.72
-0.9%
checks a member of the capital introductions team at Credit
OTC clearing
5.83
-0.4%
Suisse for a “fantastic job … She has made many introductions,
Listed derivatives
6.13
4.1%
done diligence on potential allocators and is on top of the de-
tails.” Other services that make it harder to stay profitable, such
Total
5.39
-7.1%
The Hedge Fund Annual 2018
globalcustodian.com
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