Harriet Agnew, Asset Management Editor Published October 12 2026
Welcome to FT Asset Management, our weekly newsletter on the movers and shakers behind a multitrillion-dollar global industry. This article is an on-site version of the newsletter. Subscribers can sign up here to get it delivered every Monday.
One scoop to start: Clients of Goldman Sachs' wealth management division and UK-listed hedge fund Man Group are among the victims of a major data breach at Big Four accounting firm EY, according to notifications sent out in recent weeks.
How a trillion-dollar hedge fund borrowing spree became Wall Street's cash cow. Investment banks have a rising class of superstars: prime brokers. Two decades ago, investment banks were dominated by big trading personalities immortalised in books such as Michael Lewis's Liar's Poker. Prime broking, the business of lending to hedge funds and trading firms, was seen as a boring back-office function. But the market crash of 2008 led to a crackdown on banks, with punishing regulations hobbling their trading desks.
Gradually, they bled traders and quants to rivals including Ken Griffin's Citadel and prop-trading giant Jane Street. But those firms needed someone to borrow money from to juice their market bets. Banks have been more than happy to step into the breach, lending trillions of dollars to their erstwhile rivals. Prime brokerage has gone from being a piddly revenue stream to a projected 38 per cent growth this year, according to Coalition Greenwich. Revenues from equity and fixed income prime broking are forecast to hit $47.9bn this year. While most big global banks are taking a swing at growing this business, prime brokerage is still largely dominated by US banks JPMorgan, Morgan Stanley and Goldman Sachs.
So-called prime brokerage lock-ups, the notice period a bank must give clients before pulling financing, have increased from days to weeks, to now six months for the industry's most coveted clients. Banks are gambling that the risk management of the industry's biggest hedge funds and trading firms is sophisticated and that giving up some control is a risk worth taking for growing revenues. But as this business has exploded and bank exposure to the industry keeps rising, regulators are increasingly antsy. "It has just grown and grown and grown," said one regulator. Has it become too big?
Source: Financial Times Companies · Summarized by HeadlinesBriefing