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Kirsten Bischoff, Opalesque New York: Greenwich Associates released research on US equity trading volume growth which shows the growing US hedge fund industry has surpassed mutual funds as the major source of US equity trading volume for brokerage houses. Greenwich Associates consultant John Feng said “Although the second half of 2007 was something of a wild ride, hedge fund performance for the year was relatively strong, and from a US equity trading perspective, hedge funds were extremely active.”

At the top of this brokerage chain is Merrill Lynch, which Greenwich identifies as having a market share of approximately 8-9%. Additionally, Merrill shared the highest spot on the Greenwich Quality Index rankings for overall sales and trading quality with Lehman Brothers. Mike Stewart, Merrill Lynch’s Global Head of Cash Equities and Jeff Penney, Head of Americas Equity Sales and Co-Head of Prime Brokerage talked to Opalesque about how the growth of the hedge fund industry has affected the way brokerage firms assemble their teams as well as how the industry’s growth has changed the needs of hedge funds.

The hedge fund industry’s trade volume growth is apparent not only in equities, but also across the board. “Certainly hedge funds have gone into other asset classes systematically over the last few years, and there are a number of higher-frequency trading strategies that they deploy around the more liquid products.” P......................

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