Top prime brokerage execs depart Cowen in short order

The two U.S. co-heads of prime brokerage at Cowen Inc. have left the firm just a year after joining. Michael DeJarnette and Douglas Nelson were named co-heads of the U.S. business in 2017 after coming over as part of Cowen’s acquisition of brokerage firm Convergex Group. Insiders say the pair left the company in June.

Nelson had been the CEO of Convergex for over a decade before Cowen’s $100 million acquisition. DeJarnette was an executive director of prime services. The two were only named co-heads of the U.S. business in October after Cowen fully integrated Convergex within its own platform. The acquisition closed in June of last year.

Prime brokerage has been an interesting area to watch over the last few years. Executing trades and covering margins for hedge funds, prime brokerage units are capital-intensive yet can be highly lucrative. Banks that are looking to reduce their leverage and satisfy regulators have been cutting their exposure to prime brokerage while others have looked to fill in the gaps.

Credit Suisse has been scaling back its prime brokerage unit for several years. The Swiss bank cut seven staffers from its New York operations just last month. Faced with similar capital restraints, Deutsche Bank has also recently made cuts to its prime financing business in the U.S. Meanwhile, BNY Mellon launched an FX prime brokerage unit earlier this year while Standard Bank started offering prime services late last year.

Cowen was voted the best boutique prime broker at the 2017 U.S. hedge fund services awards while earning the same honor in Europe in 2018. The company declined to comment on the departures. DeJarnette also declined comment while Nelson didn’t respond to an inquiry about the nature of his exit.

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