As you look to respond to new regulatory mandates, and eliminate the risks associated with the traditional prime brokerage financing, it makes sense to consider alternative ways to finance your long/short portfolios.
Using our global enhanced custody solution, you can borrow and finance securities directly with State Street within a segregated custody account. This provides a new channel for financing, while giving you greater visibility and control over your assets.
It can also simplify your operations and help you be more efficient in your risk management, compliance, financial reporting, collateral and general oversight functions.
A stable, differentiated financing option
The majority of our financing does not rely on short-term wholesale funding markets.
As one of the largest agent lenders in the world, we provide the opportunity to self-borrow your own securities from accounts within the same legal entity.
Asset owners and hedge funds can also self-finance by using the funds’ long positions within a custody account to access State Street’s balance sheet.
Greater asset safety
Your assets are held in a segregated account and never pooled with other clients’ assets — which they would be in a traditional prime broker model. This means we will never use them to back other transactions and trades (rehypothecated), meaning there is less credit risk.
Backed by our global service and support model for alternatives, enhanced custody is a valuable financing alternative for an evolving regulatory environment.