HedgeWorld Survey of Nearly 1,000 Hedge Fund Managers Finds Morgan Stanley, Bear Stearns, Goldman Largest Prime Brokers

'Big Three' Command More Than 70% of Market;

Prime Brokers Compete to Serve Investment Styles and Firm Sizes



HedgeWorld Plans Surveys of Other Hedge Fund Service Providers



Apr 18, 2001, 01:00 ET from HedgeWorld Limited

    RYE, N.Y., April 18 /PRNewswire/ -- A newly released survey of nearly
 1,000 hedge funds reveals that Morgan Stanley, Bear Stearns and Goldman Sachs
 rank as the largest prime brokers in terms of assets and number of funds
 served.  According to the survey conducted by The HedgeWorld Research
 Institute, the research and analysis arm of HedgeWorld Limited, the three
 firms served as primary brokers to more than 70% of the nearly $100-billion in
 assets of 998 single manager hedge funds polled.  The survey examines prime
 brokers in terms of the number of funds served and by the style and size of
 the managers, and the data used was reported to TASS as of year-end 2000.
     "The survey clearly shows a concentration of business among the three
 large brokerage house providers of primary broker services," said Ferenc
 Sanderson, Director of Research for HedgeWorld Information Services.
 "Nonetheless, there is stiff competition for the business of hedge fund
 managers and there is an increasingly large universe of managers vying to
 serve hedge funds with specialties in various size categories or investment
 styles."
     The major findings of the HedgeWorld study were highlighted in the
 Alternative Edge newsletter, which is published weekly and available free to
 registered members of HedgeWorld at http://www.HedgeWorld.com.  The findings
 will be showcased in the soon-to-be-published "HedgeWorld Annual Compendium
 2001," a comprehensive hedge fund reference guide.  Later this spring, the
 full results of the survey with detailed analysis will be made available by
 HedgeWorld.  It also will release surveys on four other categories of hedge
 fund service providers including administrators, attorneys, auditors and
 custodians.
     The study indicates that Morgan Stanley Prime Brokerage serves 210 of the
 998 funds polled and accounts for $32.6-billion in assets, while second-ranked
 Bear Stearns Securities Corp. services 187 funds with $22.3-billion in assets.
 Goldman Sachs & Co. ranked third with 143 funds and $15.6-billion in assets
 with Merrill Lynch Prime Brokerage a more distant fourth with $6.5-billion in
 assets and Banc of America Prime Brokerage with $4.23-billion.
     The survey also reveals that Morgan Stanley reigns as the most popular
 prime broker for the largest funds in the survey -- those with more than
 $1-billion in assets -- and serves 8 of the 15 such funds.  On the other side
 of the scale (funds with $10-million and less in assets) the top three
 brokers, in order, are Morgan Stanley, Goldman Sachs and Bear Stearns.
     Bear Stearns is the primary broker most commonly cited for managers
 specializing in fixed income, convertible arbitrage, market neutral and event
 driven strategies, according to the survey.  Meanwhile, Morgan Stanley is the
 most used prime broker by managers specializing in global macro and long short
 strategies.  ED&F Man is the most popular prime broker for managed futures
 players and short sellers cited ABN Amro as number one.
     "While U.S. investment banks have the lead domestically, in Europe, the
 Universal Banks have natural competitive advantages because of their asset
 management, securities lending and custody businesses that will could give
 them an edge in the fast-growing European hedge fund business," said
 Mr. Sanderson.
 
     About HedgeWorld:
     HedgeWorld is the hedge fund industry's most authoritative independent
 information source, and a leader in the development of on-line markets for
 hedge funds.  HedgeWorld Information Services provides comprehensive daily and
 weekly news, an on-line research institute, and is the exclusive Internet
 distributor of TASS, the leading on-line database of hedge fund performance.
 HedgeWorld Markets provides the only online secondary market for hedge funds
 through the HedgeTrust Exchange in affiliation with the Bermuda Stock
 Exchange.  Later this year, the company will offer the HedgeWorld FundSelect
 marketplace, an integrated global investment platform for a wide variety of
 hedge funds both in the United States and offshore.
     For additional information visit, http://www.HedgeWorld.com.  The web site
 serves the needs of institutional and high-net-worth accredited investors,
 fund managers and all the industry's service providers.  Basic registration on
 the web site is free.  Premium services are available.
 
 

SOURCE HedgeWorld Limited
    RYE, N.Y., April 18 /PRNewswire/ -- A newly released survey of nearly
 1,000 hedge funds reveals that Morgan Stanley, Bear Stearns and Goldman Sachs
 rank as the largest prime brokers in terms of assets and number of funds
 served.  According to the survey conducted by The HedgeWorld Research
 Institute, the research and analysis arm of HedgeWorld Limited, the three
 firms served as primary brokers to more than 70% of the nearly $100-billion in
 assets of 998 single manager hedge funds polled.  The survey examines prime
 brokers in terms of the number of funds served and by the style and size of
 the managers, and the data used was reported to TASS as of year-end 2000.
     "The survey clearly shows a concentration of business among the three
 large brokerage house providers of primary broker services," said Ferenc
 Sanderson, Director of Research for HedgeWorld Information Services.
 "Nonetheless, there is stiff competition for the business of hedge fund
 managers and there is an increasingly large universe of managers vying to
 serve hedge funds with specialties in various size categories or investment
 styles."
     The major findings of the HedgeWorld study were highlighted in the
 Alternative Edge newsletter, which is published weekly and available free to
 registered members of HedgeWorld at http://www.HedgeWorld.com.  The findings
 will be showcased in the soon-to-be-published "HedgeWorld Annual Compendium
 2001," a comprehensive hedge fund reference guide.  Later this spring, the
 full results of the survey with detailed analysis will be made available by
 HedgeWorld.  It also will release surveys on four other categories of hedge
 fund service providers including administrators, attorneys, auditors and
 custodians.
     The study indicates that Morgan Stanley Prime Brokerage serves 210 of the
 998 funds polled and accounts for $32.6-billion in assets, while second-ranked
 Bear Stearns Securities Corp. services 187 funds with $22.3-billion in assets.
 Goldman Sachs & Co. ranked third with 143 funds and $15.6-billion in assets
 with Merrill Lynch Prime Brokerage a more distant fourth with $6.5-billion in
 assets and Banc of America Prime Brokerage with $4.23-billion.
     The survey also reveals that Morgan Stanley reigns as the most popular
 prime broker for the largest funds in the survey -- those with more than
 $1-billion in assets -- and serves 8 of the 15 such funds.  On the other side
 of the scale (funds with $10-million and less in assets) the top three
 brokers, in order, are Morgan Stanley, Goldman Sachs and Bear Stearns.
     Bear Stearns is the primary broker most commonly cited for managers
 specializing in fixed income, convertible arbitrage, market neutral and event
 driven strategies, according to the survey.  Meanwhile, Morgan Stanley is the
 most used prime broker by managers specializing in global macro and long short
 strategies.  ED&F Man is the most popular prime broker for managed futures
 players and short sellers cited ABN Amro as number one.
     "While U.S. investment banks have the lead domestically, in Europe, the
 Universal Banks have natural competitive advantages because of their asset
 management, securities lending and custody businesses that will could give
 them an edge in the fast-growing European hedge fund business," said
 Mr. Sanderson.
 
     About HedgeWorld:
     HedgeWorld is the hedge fund industry's most authoritative independent
 information source, and a leader in the development of on-line markets for
 hedge funds.  HedgeWorld Information Services provides comprehensive daily and
 weekly news, an on-line research institute, and is the exclusive Internet
 distributor of TASS, the leading on-line database of hedge fund performance.
 HedgeWorld Markets provides the only online secondary market for hedge funds
 through the HedgeTrust Exchange in affiliation with the Bermuda Stock
 Exchange.  Later this year, the company will offer the HedgeWorld FundSelect
 marketplace, an integrated global investment platform for a wide variety of
 hedge funds both in the United States and offshore.
     For additional information visit, http://www.HedgeWorld.com.  The web site
 serves the needs of institutional and high-net-worth accredited investors,
 fund managers and all the industry's service providers.  Basic registration on
 the web site is free.  Premium services are available.
 
 SOURCE  HedgeWorld Limited