Who's calling the shots in the hedge fund industry these days? Most would answer the investors. They have become much more demanding for obvious reasons. They want certain processes in place and stricter accountability. Truth be told, the move toward multiple prime brokers, as discerned by the Tabb Group, was underway before the credit crunch. But it probably has accelerated. Other trends, according to FINalternatives, have been more funds moving fully paid-for assets to big banks and away from their prime brokers, more real time data on executions, and better access to brokers. The big two in prime brokerage remain Morgan Stanley and Goldman Sachs, but there is plenty of room for smaller players. It's all about finding a niche that can be exploited with big funds. Meanwhile, smaller hedge funds are having a harder time finding a prime that will take them on.  

For more:
- here's the FINalternatives article

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