New York-based Convergex says its prime brokerage division added over $1bn in assets last year, helped by an influx of business from European-based hedge funds.

The firm has been building out its prime services package in recent years, offering a suite of products to alternative managers, family offices and investment advisors.

Trading, custody, clearing, capital raising and research form the bulk of the services.

Recent enhancements, including improved futures execution and securities lending capabilities, have helped generate additional interest from firms at home and abroad.

The growth comes as tougher capital standards (Basel III in Europe), lower liquidity and eroding margins continue to put pressure on the major prime brokerage participants.

As a result, many of Convergex’s target clients are the same small-to medium-sized funds deemed undesirable by the large investment banks.

Doug Nelson, Convergex executive managing director and head of global clearing and prime services, said Convergex has been seeing a “steady increase” in the number of European-based hedge funds looking for US prime brokers.

“They have found the full scope of our product offerings to be a safer and more cost-effective alternative,” he said, adding that Convergex is focused on expanding its European presence.

Philip Gough currently heads up Convergex’s London-based brokerage business.