[ S U R V E Y | P R I M E B R O K E R A G E ]
Nomura
What is least surprising about these scores is that Nomura top-scores for trading and execution . With Instinet as its execution engine outside Japan , the firm owns significant market share in Europe as well as Japan . It gives Nomura an edge in servicing quantitative strategies , which it can then ply with margining and financing as well as execution and clearing . “ Trading and execution are key services for us ,” says a client . “ The team is reliable , attentive and overall of very high quality .” The score for operations , mitigated by concerns about staffing and internal communication , suggests the post-trade experience does not undo the good work in the front office . Comments as well as scores testify to an ability to keep clients in their trades , especially when it comes to sourcing stock in Japan , where Nomura has the inestimable advantage of more than 3 million retail customers . “ Great team , which does everything in their power to minimise recalls ,” writes a client . “ Not surprisingly SL access is particularly strong in Japan .” Clients even like the custody options . “ Nomura has a mirror account that offered complete segregation ,” notes a client concerned about asset safety . “ In time of stress , we can easily move assets into this segregated account , which offers some comfort .” More importantly , the sales and marketing scores confirm that even clients sensitive to transactions costs do not believe they are being over-charged and are convinced that Nomura values their business enough to want a long-term relationship . The client who appreciates “ their long-term vision to partner with promising funds rather than look at day one profitability ” is more representative than the one who expresses anxiety about the “ future direction of the PB and the range of services they offer .” In fact , recent high-profile hires on both sides of the Atlantic are aimed squarely at addressing the vulnerability in product development (“ not really seen anything new from them in a long time ”). Nomura will , nevertheless , be disappointed to read that “ the firm does change margin on certain instruments fairly regularly ,” and that “ the margin framework is quite conservative for my portfolio / strategy ,” since it aims to be competitive on margin . The detailed scores do suggest the firm needs to do more for clients on cross-margining and netting . Technology is another area where clients would like investment . Though a platform geared to the needs of quantitative managers may not suit all investment strategies , the significant issue is mobile reporting . “ Reporting portal is old and slow ,” says a client . A second adds that “ faced with certain system limitations , the Nomura prime brokerage client services team makes up for it by going the extra mile .” There is certainly nothing wrong with the score for client service . “ Nomura is a key strategic partner for our firm , and that in large part has to do with our relationship with the client services team ,” explains a respondent . “ The team is of extremely high quality and gives us confidence that Nomura is invested in our firm ’ s success .” Other vulnerabilities are more apparent than real . Nomura would not disagree with the client who says “ They are not too fond of fixed income , and the service shows that .” The firm clear swaps in Japan only . It has capital introductions teams in Tokyo and Hong Kong only , focused on Japanese and
Asian allocators . In consulting , Nomura prefers to be judged by the quality of its advice on regulatory and strategic issues . Classical consulting is confined largely to Asian start-ups and , even there , no team is dedicated to it .
26 %
By size
5 %
69 %
Weighted average scores
PROFILE OF RESPONDENTS
Large Medium Small
Weighted average scores by service area Service area
74 %
By location
14 %
2016 2017 2018 5.76 6.01 5.79
Weighted average score
Capital introductions 5.00 -6.8 % Client service 6.13 2.0 % Consulting 5.83 -0.5 % Operations 5.94 -0.5 % Technology 5.29 -5.6 % Product development 5.10 -6.6 % Risk management 5.64 1.3 % Asset safety 5.73 -0.2 % Sales and marketing 6.05 -1.3 % Trading and execution 6.07 3.7 % Delta 1 , swaps and financing 5.78 1.1 % Stock borrowing and lending 5.74 -3.8 %
12 %
Foreign exchange prime brokerage N / A N / A Fixed income 5.77 -0.1 % OTC clearing 5.89 0.7 % Listed derivatives 5.81 -1.4 % Total 5.79 -0.2 %
Americas Europe and Middle East Asia
+/ - the global average
The Hedge Fund Annual 2018 globalcustodian . com 87