The Economist reviews (subscription required) the unusual nature of Wall Street's relationship with hedge funds, this time from the perspective of prime brokers. Much hand wringing about the impact of hedge funds on the financial landscape (from a marketing of financial services perspective) is reviewed but, at least to my way of thinking, the take home bite of the article was this:
Increasingly, middlemen throughout the financial sector have been asked to prove their worth to their customers—or to find other ways of making money for themselves, by proprietary trading or making more use of their balance sheets.
A recent study by IBM Business Consulting Services argues that the vocabulary describing financial markets today—buy side, sell side, hedge funds—could be redundant within a decade. It suggests that, in future, firms will be classed according to whether they add value through “risk assumption” or “risk mitigation”.