Key Takeaways
- • Interactive Brokers (Nasdaq: IBKR) introduced High Touch Prime Brokerage and Global Outsourced Trading, new services aimed at select US hedge funds, pairing its automated platform with dedicated personal support.
- • Each eligible fund gets a dedicated Relationship Manager as a single point of contact, plus access to subject matter experts across risk, compliance, securities lending, corporate actions, tax, clearing, transfers and proxy.
- • New IBKR Outsourced Trading desks in Europe and Asia give portfolio managers access to an experienced trader 24 hours a day for domestic and international stocks, options, bonds and other instruments.
- • CEO Milan Galik said the service lets Interactive Brokers compete with large prime brokers and removes a barrier for funds that want a low-cost platform but are accustomed to personalized service.
- • Per Preqin's 2023 Service Providers Report, Interactive Brokers ranks as the top prime broker for hedge funds with AUM up to USD 50 million and the fifth largest overall by number of hedge fund clients.
Summary
Interactive Brokers Group announced on April 11, 2024, the launch of High Touch Prime Brokerage and Global Outsourced Trading, two services designed for select US hedge funds. According to the company's Business Wire release, the offering layers personal resources and attention on top of Interactive Brokers' automated, cost-effective platform, which already provides trading, clearing, custody and reporting. Eligible clients can now access these high-touch services, which the firm says allow managers to spend more time on their investment strategy and their investors.
The centerpiece of the program is a dedicated Relationship Manager who acts as a single point of contact, understands the fund's trading strategy and requirements, and navigates the firm on the fund's behalf to resolve issues and handle special requests. Funds also gain access to subject matter experts in the risk, compliance, securities lending, corporate actions, tax, clearing, transfers and proxy departments for operational support.
On the execution side, the new IBKR Outsourced Trading desks in Europe and Asia extend high-touch trading beyond North America. Portfolio managers can develop an execution strategy with, and direct orders to, an experienced IBKR trader around the clock. The service covers domestic and international stocks, options, bonds and other instruments.
CEO Milan Galik said the offering addresses a common objection to low-cost platforms. "High Touch Prime Brokerage enables Interactive Brokers to compete with large prime brokers and removes a potential barrier for hedge funds who want to move to a low-cost platform but are accustomed to personalized service," he said. The firm cited Preqin's 2023 Service Providers Report, which ranks it as the top prime broker for hedge funds with AUM up to USD 50 million and the fifth largest overall by number of hedge fund clients. Preqin also described Interactive Brokers as one of the fastest-growing prime brokers for the fourth consecutive year.
The company also highlighted standard prime brokerage terms for hedge fund clients, including no custody fees or AUM minimums, margin rates as low as 5.83%, and cash yields of up to 4.83% on balances over USD 10,000. Figures are as stated in the company's release. Details are available at interactivebrokers.com.
The centerpiece of the program is a dedicated Relationship Manager who acts as a single point of contact, understands the fund's trading strategy and requirements, and navigates the firm on the fund's behalf to resolve issues and handle special requests. Funds also gain access to subject matter experts in the risk, compliance, securities lending, corporate actions, tax, clearing, transfers and proxy departments for operational support.
On the execution side, the new IBKR Outsourced Trading desks in Europe and Asia extend high-touch trading beyond North America. Portfolio managers can develop an execution strategy with, and direct orders to, an experienced IBKR trader around the clock. The service covers domestic and international stocks, options, bonds and other instruments.
CEO Milan Galik said the offering addresses a common objection to low-cost platforms. "High Touch Prime Brokerage enables Interactive Brokers to compete with large prime brokers and removes a potential barrier for hedge funds who want to move to a low-cost platform but are accustomed to personalized service," he said. The firm cited Preqin's 2023 Service Providers Report, which ranks it as the top prime broker for hedge funds with AUM up to USD 50 million and the fifth largest overall by number of hedge fund clients. Preqin also described Interactive Brokers as one of the fastest-growing prime brokers for the fourth consecutive year.
The company also highlighted standard prime brokerage terms for hedge fund clients, including no custody fees or AUM minimums, margin rates as low as 5.83%, and cash yields of up to 4.83% on balances over USD 10,000. Figures are as stated in the company's release. Details are available at interactivebrokers.com.
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