Societe Generale has hired the global head of sales for electronic equities trading at HSBC to lead a newly-created team as part of a major revamp of the bank’s prime brokerage business in Asia-Pacific.
The French investment bank has established two new teams for prime brokerage in the region, including a client account management team to support hedge funds throughout the investment lifecycle, as well as a new coverage team to streamline access to electronic channels.
Jonathan Green, HSBC’s global head of sales for equities electronic trading in Hong Kong, will join Societe Generale this week as head of electronic coverage in Asia Pacific for equities and equity derivatives within the Global Markets division, overseeing the new electronic coverage team. He departs HSBC after almost five years with the bank, and has previously held senior equities trading roles at Barclays, Goldman Sachs and Lehman Brothers.
Speaking to The TRADE, Stephane Loiseau, head of prime sales and execution for Asia-Pacific at Societe Generale, said the prime brokerage revamp has been driven by trends in the industry, which have now been accelerated during the COVID-19 pandemic crisis.
“With the crisis in the last few months, we have seen the trend towards cross-asset management of investments, risk and technology accelerate substantially. We have also seen adoption of electronic trading accelerated by the fact that we are all working in different environments and arrangements, and we don’t see that changing any time soon,” said Loiseau.
“We have been working on revamping the prime brokerage strategy in APAC for some time, but also globally. We are aligned globally, but we wanted to capture opportunities in Asia markets specifically and have changed the interaction with our investment management client base to focus on account management and electronic execution.”
The electronic coverage team will look to streamline access to electronic trading offerings for clients, including algos, direct market access, and other alternative electronic execution tools, across equities and derivatives trading.
“The goal is to reposition the electronic trading offering at the centre of the global markets division. While electronic has always been important for us, this revamp brings together all the different electronic parts that we had within global markets,” Loiseau added. “Implementing that across equities and derivatives hasn’t really been done before. They are still separate worlds in terms of how trading services are delivered, but we are trying to bridge that gap for our clients.”
At the same time, the new client account management team will look after clients across the investment lifecycle, from onboarding through to post-trade, including execution. In forming the new teams, Societe Generale sought to bring talent from its back-office to the front-office, including those with IT or operational expertise.
Loiseau added that the traditional divide between the front- and back-office, or split functions between front-office sales and operationally-driven teams, will eventually disappear, as the sales role becomes the account management position for clients throughout the value chain.
“Typically, at banks you see these roles existing in some fragmented forms across various departments, teams and people, which can make the follow-up more difficult for clients. We are breaking that traditional divide, and bringing people that come from an IT or operational background to the front-office, and saying this is a client-facing role. I think the new natural frontier will see the role of sales become the account manager for the clients,” he explained.
Earlier this year, Societe Generale signed a major seven-year deal with cloud-based trading system provider Nuvo Prime to combine the swap and cash prime finance onto a single infrastructure. Targeting growth of its prime brokerage division, Societe Generale said at the time a unified prime services offering will deliver more efficient transactional management across asset classes and products globally.
Many of the largest prime brokers have conducted reorganisations in order to closer align the division with their electronic trading businesses. Last year, Citi combined its equities, prime brokerage and securities services division into a newly named Equities and Securities Services unit, as it looked to capture the increasing electronification among hedge funds.
Prime brokerage has now become tied to electronic execution and considered a pathway to other products within the equities franchise such as research, equity derivatives, and synthetic financing.