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Andrew Saunders Benedicte Gravrand, Opalesque Geneva:

Three competing investment banks have reportedly said that "dozens" of Jefferies hedge fund clients were trying to find other places to park client money and execute trades. Indeed, fears of contagion from both bankrupt broker-dealer MF Global to which the investment bank Jefferies has a $9m exposure and the European sovereign debt to which Jefferies has a net short exposure of around $38m is rattling nerves. The whole hedge fund industry was put off balance by the Lehman bankruptcy three years ago, where a lot of money became unavailable and many funds ended up either blocking redemptions or liquidating. And so as they say, once bitten twice shy.

The same CNN report states that Jefferies has around 400 hedge fund clients that use its prime brokerage services.

"We received a number of phone calls from Jefferies customers, and it started a few days ago," Andrew Saunders told Opalesque today (Nov. 4th). "A fair number got in touch with us maybe between ten and twenty." Saunders is Vice President of the Capital Alternatives Group at Direct Access Partners, an American boutique prime broker.

"Hedge fund managers are looking around for other alternatives; everyone has seen that [situation] before, in 2008," he added. Back then, a lot of manage......................

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