A major Russian prime brokerage is expanding its UK client base at a rapid rate, giving impetus to the view that emerging markets like Russia will continue to see unabated growth. The brokerage, Otkritie Securities, owned by one of Russia’s largest banking companies, announced plans this week to double the number of hedge fund clients before the year ends.
Roman Lohov, chief of global markets and investment banking at Otkritie Bank and CEO of Otkritie Securities, acknowledged his firm has a queue of potential customers that will see the bank’s UK clientele increase from around 40 to 100 by 2011. Hedge fund assets in the company’s custody operation are also anticipated to double to $2bn within the same time period.
“We are building serious traction in Europe and expect to make rapid progress in the coming months,” Lokhov declared. “Our aim is to be the leading prime broker for emerging market hedge funds in the world.”
Otkritie is based in Moscow and London, and began its prime brokerage business only 12 months ago. It now has a complete prime brokerage operation in the UK, US, Russia and Scandinavia, and also provides execution services in several of the world’s emerging territories, including Turkey, Brazil, and the CIS. An execution service in India is slated to go live this October.
The firm has seized on recent opportunities, such as acquiring three of Russia’s crisis-plagued banks in a merger scheduled for October. It is continuing its ongoing aggressive hiring campaign and recently added a team of researchers from Credit Suisse Russia.
The emerging market’s growth has been boosted by excellent performance in Russia and Latin America. Fund managers have taken note and are planning to capitalize on the industry growth. Only last week, Brevan Howard, one of Europe’s largest hedge funds, made public plans to initiate a new office in São Paulo, Brazil.