ING plans development of synthetic prime brokerage business with hire of Colin Bugler

Date: Tuesday, June 29, 2010
Author: Hedge Funds Review

ING has ambitious plans to create a multi-asset class synthetic prime brokerage product for hedge funds and has hired industry veteran Colin Bugler to run the business.

Bugler will lead ING's newly created synthetic portfolio solutions (SPS) team.

SPS is part of ING's global securities finance business which also includes equity and fixed income securities lending and repo teams.

The creation of SPS is part of ING's plans to integrate and expand its business with hedge funds, said Michael Baudo, co-head of ING's global securities finance business.

The SPS team is built around and incorporates ING's existing equity contracts for difference (CFD) business. One of Bugler's first tasks will be to expand the range of products offered by SPS to include fixed income and derivatives.

"Our traditional CFD product was equity focused, while SPS will cover all markets and securities," said Baudo.

Bugler and his team will work closely with ING's equity lending and repo business to provide financing services to hedge funds, said Baudo.

Bugler will report to Richard Pryce, head of equity lending and repo at ING.

"Our hedge fund coverage will be integrated under one group which will be able to provide clients with short coverage and financing for long positions," said Baudo.

Bugler is a well known figure in the prime brokerage industry. He was most recently head of global prime brokerage and equity finance at RBC Capital Markets. Prior to that he held a similar position at Scotia Capital and spent 11 years in London as head of international prime brokerage and securities lending at Merrill Lynch.

Baudo sees increasing demand for synthetic prime brokerage services, "especially from large hedge funds who want to diversify their credit risk and exposures across the board".

He said most hedge funds had settled on their traditional prime brokers but many are still seeking greater credit diversification through synthetic financing providers.

"We see significant room for growth in synthetic prime brokerage," said Baudo.

"ING has been in the equity CFD business for 10 years and we have had good results and feedback for that product. Adding fixed income and derivatives products means we can offer a stronger and more integrated service to hedge funds," he added.

ING's global securities finance business also provides linear equity derivatives and fixed income repo services to hedge funds, in addition to synthetic solutions and equity lending and repo.