hold secutires of hedge funds and make loans to hedege funds while holding these secutires as collaterol (i think).
but prime borkers also conduct in hypothcating (i no i have spelt it wrong) which means the debtors keep their security (which acts as colloteral) and on top of that get a loan from the prime broker .
so which is it 1st or 2nd or both
plus if hedge funds do hyothecting then where do they get the money to loan (it dosnt make sence since i know prime borkers do hold hedge funds secutires)
also prime borkers make loans to increase levearge of hedge funds, the i pressume this loan can be of any asset class (or is it cash)
thanks if any1 knows
Who do you think it is...