Pershing

Three years have passed since the start of the financial crisis, yet asset managers still face volatile capital markets, stalling growth and continuing financial system risk, especially in the Eurozone.

How did we get here? Why have extraordinary measures by governments and central banks failed to produce self-sustaining growth? What are the market and macro outlooks going forward?

For greater insight, download your copy of Policy and Prospects: Are Governments Tipping the Balance Toward Depression? This is a timely diagnosis of our current economic predicament—and a stern prescription for a cure. Authored by senior analysts at Roubini Global Economics and available exclusively through Pershing, this provocative analysis puts today's events into the broader context of long-standing global imbalances. It also explains why contractionary policies are likely to be self-defeating, neither reducing deficits nor restarting growth. It addresses such questions as:

• Why did unprecedented global growth turn into an extended balance-sheet recession?
• Will poorly-timed fiscal retrenchments tip the global economy into a 1937-style double dip—or even a depression?
• What key structural reforms are needed to restore long-term global stability?
• How should asset managers create portfolios in response to future economic prospects?

Pershing LLC, in conjunction with FA Insight, a consulting and research firm that works exclusively within the financial services industry, has developed a study that re-examines some of the traditional business practices of an investment professional. It also highlights new technology and efficiency solutions that can help boost productivity, profitability, growth and value. The findings provide a strong argument to encourage investment professionals to analyze their current business practices and to invest the time to fully understand the benefits of conducting business via a consolidated brokerage platform. The study covers topics such as:

• Building Business Value
• Productivity and Efficiency Impact
• Enhanced Client Experience
• More Effective Business Development

Dually registered advisors are the fastest growing segment in advisory services. The hybrid model represents an opportunity for broker-dealers to grow and compete in the next decade and beyond. Research shows that those who deploy some form of hybrid strategy will improve their ability to recruit investment professionals and help them grow organically.

To learn more, download your copy of The Economics of Constructing a Hybrid Platform, a new study published by Pershing. The study offers a clear economic blueprint for shifting to a hybrid platform. It shares up-to-the-minute market intelligence, as well as specific strategies for meeting the needs of dually-registered advisors with the right platforms, business models and pricing. The study also includes detailed case studies that illustrate its principles in practice.

This informative report offers practical insights into some of your most critical business issues, including:

• How can you deliver a compelling value proposition?
  Few broker-dealers can afford to be all things to all investment professionals. Where should you focus your investments? How can you capitalize on your unique strengths?
• Will a hybrid model truly help you achieve your goals for growth, recruiting and retention?
  Answering this question frankly demands a close reading of your investment professionals? most pressing needs and wants.
• Should you allow third-party custody?
  You want to balance flexibility for your investment professionals with careful management of your own risk. Some broker-dealers are finding ways to retain significant economic and compliance control by using a corporate RIA.

Leverage—exposure that is greater than the capital invested—caused the downfall of many a portfolio during the financial crisis, even in cases where asset managers had been using sophisticated hedging and diversification techniques. During this period, many asset classes declined at the same time, and predicting losses proved virtually impossible. While leverage continues to give many investors pause, monitoring the level of risk that leverage poses to a portfolio can often help bolster investor confidence.

Download your copy of Portfolio Leverage Ratio, a new report published by Pershing Prime Services and BNY Asset Servicing. This informative paper outlines a methodology for using the leverage ratio as an alternative, complementary risk metric—one that is designed to help managers and investors understand their maximum risk exposure.

Through detailed explanations and clear illustrations, this report highlights the key issues involved in assessing the potential impact of leverage, such as:

• Why ex-post variance risk metrics, such as the Sharpe Ratio, can fail as managers' styles change and leverage rises during periods of stability
• How the leverage ratio can complement ex-ante metrics by attempting to assess the potential magnitude of a loss, rather than its probability
• The varying impacts of different methods for levering a portfolio, including borrowing, derivatives, delayed delivery transactions and short positions

Separately Managed Accounts: How Hedge Funds Are Responding to Changing Investor Demands

In the wake of the 2008 financial crisis, many investors shied away from traditional pooled funds, concerned by both the opacity of their positions and the limitations on their liquidity. That is why separately managed accounts (SMAs) have emerged as an increasingly popular hedge fund structure.

How widespread is this movement? Will it become a passing fad, or the "new normal" to which hedge fund managers will have to adjust? And, how should you respond to the changes?

Commissioned by Pershing LLC, a BNY Mellon company, this new research study draws on detailed interviews of investors and hedge fund managers by independent consulting firm Greenwich Associates. This report examines how newly assertive investors are using SMAs as a tool to increase their level of control. The report also seeks answers to a host of important questions, including:

• What are the driving forces behind the move toward SMAs?
• What do investors typically ask for from hedge funds when negotiating an SMA structure?
• How large is the divide between investors and hedge fund managers regarding minimum investment requirements?

The use of leverage within the hedge fund industry is re-emerging after the financial downturn of 2008. Yet, that time of turmoil may have left a permanent mark. How have the rules for securities lending shifted? And, how should you respond to the changes?

For a timely, in-depth look at the ongoing transformations sweeping the industry, please download Lending and Leverage: The New Securities Finance Model for Hedge Funds, a new research report produced by independent consultant firm Finadium LLC and commissioned by Pershing Prime Services LLC, a BNY Mellon company.

The report reveals a resurgent role for securities lending in the aftermath of the crisis. In addition, it uncovers key findings that illustrate how various players are adapting to this new terrain, including:

• How using established leverage benchmarks could help build confidence among institutional investors
• Why it is becoming essential to gain access to lending inventory through retail and institutional channels
• The implications behind the trend toward transparency in securities lending, driven by electronic marketplaces, synthetic securities loan products and direct borrowing
• How industry trends could affect large and small hedge funds very differently