Hedge Funds Review – A move to separate custody accounts since the financial crisis has turned into a major trend with hedge funds now placing a growing portion of their unencumbered assets with prime custodians.
Hedge fund assets available for prime custody have risen 40% since 2010 to $684 billion at the end of August, representing a quarter of all assets under management. The increase in assets parked with custodians is a result of increasing AUM in general coupled with reduced reliance on prime brokers for financing, according to a study by BNY Mellon.
