Robert Akeson, chief operating officer of Mirae Asset Securities (USA), says the firm will target “overlooked and underserved” hedge funds in the US as it rolls out its prime brokerage platform.
The New-York based unit, backed by South Korean financial services giant Mirae Asset Financial, has been active in North America for over two decades, mainly providing research.
However, the division is rolling out prime brokerage, securities lending, repo, delta one and clearing businesses in 2017 as part of its parent company’s global diversification strategy.
The expansion comes as some of the larger, traditional bank-owned prime brokers are jettisoning less-profitable hedge fund clients due to regulations which have forced them to set-aside more capital.
Mirae Asset Securities (USA) received FINRA approvals to operate prime brokerage services last month, Akeson told Global Investor/ISF, and this week announced a partnership with FIS.
The tech firm is tasked with building a competitive securities finance platform for Mirae's US brokerage operation and will streamline trading, compliance and risk, middle and back office services, securities finance, corporate actions and tax.
“We’re in unique position given that we do not roll-up to a bank holding company,” Akeson said.
“Basel III doesn’t directly impact us, whereas others have significant balance sheet restrictions and shrinking capacity due to regulation.”
Akeson says Mirae Asset Securities (USA) is an extension of Seoul-based Mirae Asset Financial’s asset management capabilities.
Overall, the group had assets under management of $100bn, wealth management-related assets of $203bn and insurance services operations of $29bn.
“We want the world to know Korea’s leading financial services firm has entered the prime brokerage business in the US.
“We plan to offer our prime brokerage services to US-based hedge funds under the $750m AUM bracket with long/short equity strategies,” Akeson added.
“Over time, this will extend to Europe.”