Q1 2023 Prime Broker Performance: Insights into Credit Suisse, JPMorgan, and BNP Paribas
Prime brokerages saw a significant shift over the year, from January 1, 2023, to May 1, 2023. The landscape has been altered, with some brokers witnessing growth with serviced funds in the tech sector.
Utilizing data and insights available on the Radient platform, let's delve into the key highlights of the latest Form ADV filings from three leading prime brokerages: Credit Suisse, JPMorgan Chase, and BNP Paribas.
Among the top ten prime brokerages of the year, Credit Suisse Group AG faced the steepest downturn.
Credit Suisse Group AG faced a challenging period in the first half of 2023.
In Q1 2023, Credit Suisse lost $75.2 billion in customer deposits around UBS's takeover announcement last March. The Swiss government initiated the emergency acquisition of Credit Suisse by UBS to stabilize the global banking sector after the collapse of two US regional banks.
Credit Suisse began the year servicing 902 funds. Despite a minor increase in the first three months, with the number of serviced funds reaching 906 by March, there was a sharp decline in the subsequent months.
By April, the number had dropped to 651, and by the end of May, it further decreased to 595 funds. This represents a net decrease of 307 funds, marking a 34.04% reduction from the start of the year.
Similarly, the firm's total gross asset value, which began at $3.3 trillion in January, saw a significant decrease. Despite modest increases in February and March, bringing the value to $3.305 trillion, a major drop was recorded in April, with the total gross asset value decreasing to $2.87 trillion.
By the end of May, the value had further declined to $2.43 trillion, reflecting a net decrease of $865 billion or a reduction of 26.22%.
Among the top private funds still managed by Credit Suisse as its prime broker are Millennium Partners, LP with a gross asset value of $384.64 billion, and Citadel Global Fixed Income Master Fund Ltd. with a gross asset value of $199.70 billion.
In contrast, JPMorgan Chase & Co., one of the major Prime Brokers in the finance industry, demonstrated a steady performance in its operations.
JPMorgan Chase & Co. retained its position at the top of the pack.
Starting with 2543 serviced funds and ending with 2552. Despite minor fluctuations throughout the months, the firm ultimately observed a slight net growth of 9 funds, equivalent to a 0.35% increase from the start of the year.
By the end of May, the total gross asset value had reached $5.72 trillion. This reflects a net increase of $95 billion, marking a growth of 1.69%.
Lastly, BNP Paribas experienced a period of robust growth.
After the announcement of Credit Suisse's intention to shut down most of its prime brokerage services back in November 2021, they referred their clients to the BNP Paribas.
Risk Magazine commends the firm's successful onboarding of former Credit Suisse clients resulted in a $10 billion to $20 billion increase in prime balances. BNP Paribas has been named Prime Broker of the Year, Derivatives House of the Year, Derivatives Client Clearer of the Year, Currency Derivatives House of the Year, and Risk Solutions House of the Year by Risk Magazine.
By May's end, the value had increased to $2.34 trillion. This growth signifies a net increase of $108 billion, marking a rise of 4.84% since the beginning of the year.