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Back to blog December 11, 2019 No Comments Author: Andy Jones

Schwab Acquisition of Ameritrade

Charles Schwab recently announced plans to acquire Ameritrade for $26 billion. The combined entity will have 24 million customer accounts holding ~$5 trillion assets.

While most people are familiar with Charles Schwab and Ameritrade for their enormous retail brokerage businesses, most do not know these firms also offer prime brokerage and custodial services to institutional investment funds.

Our research database tracks 53,711 institutional investment funds (hedge funds, private equity funds, venture capital funds, real estate funds, etc.). These funds often use third-party providers as prime brokers and custodians.

This data study reports on the prime brokerage and custodial services offered by Schwab and Ameritrade.

Prime Broker

9,232 of the investment funds we track use a prime broker, representing $6.5 trillion in assets under management (AuM).

  • Ameritrade is the prime broker for 73 individual funds across 49 firms with $2.1 billion in assets, 0.03% of the prime broker market share (by AuM) of the funds we track. Ameritrade ranks 43rd by AuM, amongst prime brokers serving investment funds.
  • Schwab is the prime broker for 133 individual funds across 70 firms representing $8.7 billion in assets, 0.13% of this market by AuM. Schwab ranks 31rd by AuM, amongst prime brokers to investment funds.

Custodian

  • Ameritrade is the custodian for 180 individual funds across 116 firms representing $5.5 billion in assets.
  • Schwab is the custodian for 559 individual funds across 211 firms representing $32.0 billion in assets.

Summary

As service providers to investment funds, Schwab is much larger than Ameritrade. However, in this realm, both firms represent a small fraction of the market for prime brokerage and custodian services to institutional investment funds.

Contact us to learn more about the service providers to investment funds – prime brokers, custodians, administrators and marketing. Through our service at www.InvestmentAdvisorSearch.com, we track the entire competitive landscape, including their market share and their individual customers by AuM.