Wall Street Banks Strike Capital Deals to Lend Into Hedge Fund Boom

Wall Street banks strike capital deals to lend into hedge fund boom

Deal between Morgan Stanley and Blackstone shows how the credit risk transfer market is expanding to riskier assets

Wall Street banks embrace risk transfer deals to boost hedge fund lending capacity

Wall Street banks, including Morgan Stanley, are increasingly turning to complex synthetic risk transfer (SRT) deals to unlock capital and expand lending to hedge funds, as they compete for a larger slice of a booming prime brokerage market, according to a report by the Financial Times. In one of the most notable moves, Morgan Stanley recently struck a capital relief deal with Blackstone, transferring a portion of the risk on its prime brokerage…