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From Kirsten Bischoff, Opalesque New York:
In the newly released research report by Massachusetts-based firm Finadium "Trends in US Equity Finance Costs for Hedge Funds and Other Borrowers" author Josh Galper notes that the current cost of securities borrowing has many funds looking at their financing costs with fresh eyes.
"Firms just looking into the situation are behind the game, but not all is lost; there will be many opportunities to make, and lose, money in equity finance in the years to come," says Galper. (www.finadium.com)
The growth of various fund fees such as equity borrowing comes at a time when many funds have seen decreases in budget resources due to investor redemptions and/or negative performance.
Of the numerous options Galper explores within the report, one is the rollout of technology that will allow hedge funds to lend out their own equity holdings. It may be that only a few hedge funds have the means to take advantage of this technology as research by Celent projected that hedge funds would scale back technology budgets by 20% in 2009, tying the hands of many funds that may benefit from exploring some of these options.
The Wall Street Letter recently reported that three service providers to the hedge fund space, Interactive Brokers, SunGard, and International Securities Exchange have contributed to financing for a system being laun...................... To view our full article Click here
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