FBR Capital Markets Corp. started a prime brokerage to be run by a team hired from Shoreline Trading Group, a prime brokerage for hedge funds.
The Washington midsize investment bank said last week that the brokerage will supply products and services comparable to those of large broker-dealers but with more personalized customer service.
The move came after an outflow of prime brokerage customers from a number of marquee Wall Street banks.
Prime brokerage involves lending hedge funds money or securities so they can amplify their bets, as well as supplying them with administrative services like settling trades and holding securities in custody. The business can yield significant fees and generated revenue industrywide of more than $12 billion last year.