Deutsche Bank’s Global Prime Finance division today announced the launch of a hybrid custody version of prime brokerage, named DB Integrated Prime Custody. Several large European clients have signed up for the new platform and hundreds of millions of euro value in securities have already been segregated. Although the initial launch focus is on European-based clients, Deutsche Bank expects to offer this product to US-based prime brokerage clients in early 2010.
The enhanced platform allows funds to hold unencumbered assets that were typically held within their prime brokerage in a separate custody account held at BNY Mellon. The new offering will also enable unencumbered assets to be held within Deutsche Bank’s separate custody division. Furthermore, Deutsche Bank is committed to an open architecture approach should clients have a preference for a particular custodian.
A key feature of the model is minimal change to existing operational, documentation and control processes. The operational burden is assumed by Deutsche Bank subject to daily oversight and control by the fund manager. Extensive investment has been made in the enhanced platform, associated technology and consolidated reporting portal.
Deutsche Bank has taken detailed advice from a wide variety of industry experts including major law firms such as Clifford Chance and German firm Hengeler Mueller, investors, managers, consultants and PriceWaterhouseCoopersLLP (PwC), the administrators of Lehman Brothers International (Europe). Furthermore, Deutsche Bank has worked with the PwC Risk Assurance group on a SAS70 Certification which includes an independent assessment of Deutsche Bank internal processes and controls.
Deutsche Bank co-head of European prime finance & global head of securities lending, Anthony Byrne, commented “We are proud to be taking a leading stance in such a rapidly changing space. Investors and industry consultants are particularly pleased that managers are not being forced to deal with an affiliated special purpose custody vehicle or an internal custody division. The almost identical look and feel of the integrated operations and reporting functionality has also been very well received.”
Art Certosimo, senior executive vice president and head of Alternative Investment Services and Broker Dealer Services at BNY Mellon, said: “We are delighted to be working closely with Deutsche Bank on this impressive new platform. This model is clearly a major step forward in the evolution of the prime brokerage industry and BNY Mellon are very pleased to have contributed to its development. Managers and advisers have been particularly struck by the simplicity and operational elegance of the structure as well as the strong protection it affords.”
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About Deutsche Bank
Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 78,530 employees in 72 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.http://www.db.com/
About the Bank of New York Mellon
The Bank of New York Mellon is a leading private equity and hedge fund administrator with an extensive global presence, including locations in Bermuda, Cayman Islands, Hong Kong, Ireland, Luxembourg, Japan, Singapore and the United Kingdom, as well as US offices in California, Florida, New Jersey and New York. In addition to alternative fund administration the company offers a wide range of cash management, foreign exchange, collateral management, trust, operational outsourcing and custody services to the hedge fund industry. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $20.7 trillion in assets under custody and administration, $926 billion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.8 trillion per day. Additional information is available at http://www.bnymellon.com/