Could LPs explore renting out their client franchise?

Could LPs explore renting out their client franchise?

Can you rent a liquidity provider? And not just any liquidity provider, but one like JP Morgan or Deutsche Bank, to gain access to their huge client franchises?

This idea was raised during the FX Markets Europe conference in London on December 3 (if you weren’t there, you missed an excellent event).

In outline, the rental arrangement might start with a regional bank that is seeking to execute an FX trade on behalf of a local corporate client. The bank could take that trade to a big dealer in the hope that the resulting, skewed price would entice one of the dealer’s own clients – maybe a systematic hedge fund – to take the other side of the trade, potentially allowing both sides to get it done at a good level.

If the alternative involves venturing into one of the market’s primary venues – increasingly avoided by the biggest dealers – then it has obvious…
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