Hackett’s new position was created to better organize Citigroup’s prime brokerage efforts with the company now lagging well behind firms like Morgan Stanley, Goldman Sachs Group and Bear Stearns Cos. in the prime brokerage arena, Reuters reported. Bill Heinzerling, the head of global finance, who is also responsible for short-term debt products and retail trading, had overseen prime brokerage as part of broader responsibilities.
Najib Lamhaouar, the former global sales head for futures, will replace Hackett as head of global futures.
Morgan Stanley, Goldman and Bear Stearns together control about two-thirds of the prime brokerage market, which will generate revenue of about $7.5 billion this year, according to a recent report by Deutsche Bank Securities. Smaller players like Citigroup, Deutsche Bank AG, Lehman Brothers Holding, Merrill Lynch & Co. UBS AG and Credit Suisse First Boston have stepped up efforts to take a bigger piece of the pie.
Citigroup Chief Executive Charles Prince has said that prime brokerage is one of a handful of businesses that it has targeted for market share growth.
Brokerage services for hedge funds – which range from trade execution to loans of money and stock to providing office space – has been one of Wall Street’s most profitable and fastest growing businesses.