Global crossing keeps credit funds in credit

A growing number of prime brokers have introduced cross-product margining for credit hedge funds, allowing their clients to post margin on their portfolio's net risk

As new hedge fund credit strategies have sprouted with a proliferation of instruments to hedge and profit by, so too have prime brokers expanded their offerings to ensure funds can use and trade the new opportunities.

The increasing breadth of prime brokers' offerings in credit, particularly cross-product netting, remains largely invisible to the outside world. But it is a major driver of funds' profitability, and reduction in collateral fixed income strategy portfolios must post with brokers.

Pau