Cantor Fitzgerald outsources cap intro to Layton Road Group
By Joe Parsons March 25, 2021 2:29 PM GMT
Cantor Fitzgerald has outsourced its capital introduction function to specialist Layton Road Group, replacing BNP Paribas’ as the firm’s main client as the French prime brokerage brings the function back in-house.
The New York-based firm has opted to use Layton Road to facilitate capital raising meetings and events for hedge funds that use its prime brokerage services, freeing-up costs of managing a capital introduction team in-house.
Cantor will also be able to tap Layton Road’s portfolio of investors that will be best–suited for its range of small and mid-sized hedge fund clients.
“Raising money for hedge funds has become a lot harder over recent years. We have found that engaging with a firm whose sole expertise is asset raising for alternative managers, allows us to leverage that into high quality capital introduction for our client base,” said Jon Yalmokas, global head of prime brokerage, Cantor Fitzgerald.
“The Layton Road team has very extensive allocator relationships, which we feel is stronger than anything we can create in-house. With decades of experience, Layton Road has a very unique set of investors which is more appropriate for our client base.”
Last year, Cantor’s global head of capital introduction, Emma Sugarman, left to ESG-focused hedge fund Argos Global Advisors as a business development executive.
The decision to use Layton Road comes as many prime brokers have struggled meet changing expectations from hedge funds.
The COVID-19 pandemic and the global shift to remote working severely impacted the fund-raising environment with no in-person capital introduction events taking place, highlighting the need for digital and virtual technologies.
Cantor replaces BNP Paribas as Layton Road’s main prime broker client, with the French nearing the completion of its integration with Deutsche Bank’s prime brokerage business, including its capital introduction team.
With BNP absorbing Deutsche’ clients and staff, the bank opted not to renew its contract with the firm.
Layton Road was founded by Tom Mahala, BNP’s former head of capital introduction and deputy head of prime brokerage sales. It maintains capital introduction relationships with over 1.000 institutional investors, and offers placement-agent services with a client base consisting of 15 hedge fund and private equity firms.
“We believe that the current client mix of strategies and size of firms will be a great addition to the inventory we can share with our diverse investor base. Our plug & play cap intro model, with six very experienced professionals should have an immediate impact on the Cantor PB franchise,” said Mahala.
“Cantor’s fixed income business has a long, successful and well-known history, while its equity business is a bit undiscovered on the street. The Layton Road team hopes to be another vocal advocate to drive additional business into all of Cantor’s business lines.”
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