Are you a quant who needs a big brother? Does your hedge fund need a prime brokerage and some state-of-the-art risk tools? If you answered 'yes' there's good news for you.
UBS AG is unveiling UBS Quant HQ, a unit that will deliver the Swiss bank's prime brokerage and direct-execution trading businesses to quant hedge funds.
The New York-based UBS unit will be run by Scott Stickler, the firm's global head of the operation. The new unit will offer strategies for equities, options and futures with support for foreign exchange and fixed income to be added later.
"One of the trends we're seeing is a number of startups, folks coming out of big banks because of the Volcker rule and starting their own hedge funds," Stickler said in a phone interview. "Clients are coming to us who wanted us to be in this business and who want to be able to take advantage of our global presence and our counterparty safety, stock-loan and execution capabilities."
The bank installed "strong risk-management systems and procedures" for clients using the Quant HQ service, in part so it can expand the business across asset classes and regions, Stickler said. The systems will also help ensure clients are hewing to their strategies in real time and enable UBS to give quantitative funds more financing intraday, he said.
"Some funds may require more leverage intraday and more systems to monitor that," Stickler said. "We're now able to right-size leverage based on the strategy and the hedged nature of the strategy."
The UBS soffering is not just liited to the United States. Dave Mishoe will be regional head of Quant HQ for EMEA and Steve Hammerton will oversee the Asia-Pacific region. Both men will report to Stickler in New York.