Banks eye more ways to earn on hedge funds
(Reuters): After years of earning huge fees from hedge fund clients, investment banks are eyeing yet another way to extract revenue from these treasured customers. Banks such as Morgan Stanley and Credit Suisse are looking to mine their lucrative prime-brokerage businesses by charging a fee to raise money for their hedge fund clients. The initiative is not without potential conflicts, as hedge funds that haven’t signed up for the service may find their prime-broking bankers favoring clients now paying for capital raisings. While still a relatively new and fledgling operation, capital raising for hedge funds is a potential cash cow for banks as fees charged will come as a percentage of the funds raised.
Category: Business
