Hedge Funds

The broker vote is not as reliable a forecaster of market share for hedge funds as for mutual and pension funds.  A hedge fund should have at least 2-3 prime brokers.  These brokers supply financial services such as custody services, securities lending and financing.  We will tackle these items at a later date.  The world of prime brokers used to be dominated by Goldman Sachs, Morgan Stanley and, to a lesser extent, Bear Stearns.  Since the financial crisis in 2008, the space has added Credit Suisse and Deutsche Bank.  JP Morgan has replaced Bear Stearns because of its acquisition.  Please reference this March 2010 article for a fuller understanding of the players.  These prime brokers are also sell side firms.  Since there are already strong existing relationships between hedge funds and their brokers, the market share for hedge fund commissions are skewed in favor of them and may not follow the results of the broker vote.