Citigroup Inc. (C) is boosting its Asian Prime Finance division by increasing the headcount 20% to 80, according to a Reuters report. The hiring comes as part of the company’s effort to take advantage of the boom in the hedge fund industry in the region. Citi is expanding its capital introduction, OTC, client service as well as futures squads as part of this effort.
Citi’s Prime Finance is a comprehensive, integrated business unit comprising prime brokerage, financing solutions and capital introductions, supported by cutting edge technology and advanced reporting.
Not only is Citi getting many new sole mandates, it is also witnessing second and third mandates arriving from existing managers in Asia, according to the report. A number of important positions have already been filled up.
Citi’s business in the Asian region is substantially contributing to its overall revenue. Prime finance business has been a major area of thrust. The business strength comes from the company’s capacity in providing a broad range of services including, custody and fund administration services to trading execution, financing and distribution.
Companies like Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) were major players in this market prior to the 2008 financial crisis.However, in recent times, Credit Suisse Group AG (CS), Deutsche Bank AG (DB) and UBS AG (UBS) have earned respectable market share in this business in Asia.
By leveraging and enhancing Citi's corporate strength in over 100 markets globally, Prime Finance now serves clients in more than 70 countries. We believe that Citi’s effort to boost this business would be a strategic fit and hence augurs well with expectations for solid top-line support.
Citi currently retains its Zacks #3 Rank, which translates into a short-term Hold rating. Also, considering the fundamentals, we are maintaining a long-term Neutral recommendation on the stock.
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