08/03/2011

Nomura Building US Prime-Brokerage Unit

Nomura, which already sells prime-brokerage services to hedge funds in Asia and Europe, now wants a piece of the U.S. market.

It’ll be a tall order for the Tokyo bank, given the dominance of major Wall Street banks and the proliferation of so-called mini primes in the wake of the financial crisis. But Nomura apparently believes it can distinguish itself in several areas, including stock lending, swaps trading and capital introduction for Asia-focused managers.

Just last week, the bank’s brokerage unit, Nomura Securities, promoted Declan Breslin to U.S. head of prime services, transferring him from the European prime-brokerage unit. Meanwhile, Darci Tobin was hired as head of prime-services origination, with a mandate to develop and sell prime-brokerage products to U.S. managers. She has experience both in product development and sales, having previously worked at Credit Suisse, Morgan Stanley and fund operator Paloma Partners.

Word has it that Nomura is looking to fill other prime-brokerage posts in the U.S.

The bank already counts a handful of U.S. hedge fund clients whose needs are mostly limited to borrowing stocks of Asian companies. Nomura’s goal is to build on those relationships by offering an increasing variety of services.

“They have the pieces necessary to create a decent prime brokerage” in the U.S., one market player said.

Establishing a foothold won’t be easy, however, given the presence of prime-brokerage powerhouses such as Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan and Morgan Stanley. Nomura may be handicapped by its Baa2/BBB+ credit rating from Moody’s and S&P — two to five notches below its major rivals. “The main criteria these days for allocating balances are financing rates and counterparty stability,” said Heather Evans, president of True Color, a New York consulting firm.

Only a few months ago, there was talk that Nomura was laying off staff and thinking of dismantling its prime-brokerage businesses in Asia and Europe. It now appears the bank merely was trying to cut redundant positions it inherited via its 2008 takeover of Lehman Brothers’ Asian and European operations.

Back Print