Wells Fargo (NYSE:WFC) is gearing up to enter the prime brokerage industry with its purchase of Merlin Securities LLC. According to J.P. Morgan Analyst Vivek Juneja, Wells Fargo has been looking to build a prime brokerage business since December.
Merlin, which provides services for hedge funds and other businesses, has about 500 clients and 100 employees and currently utilizes the custody services of JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS). Merlin’s managing partners, Stephan Vermut and Aaron Vermut, will join Wells Fargo.
Christopher Bartlett, head of equity sales and trading, said of the deal, “There is a window of opportunity that exists today because of the macro landscape, some of the attrition on the street and some of the regulatory changes that are coming. This is another example of our commitment to the capital markets business.”