Finadium: Asset Managers on Securities Lending 2021 Survey

Finadium has released our 2021 survey of asset managers in securities lending. Since 2008, this survey of managers in North America and Europe has tracked current operational practices and the forward-looking thinking of this sector. This year’s report covers 30 large institutional asset managers with $41 trillion in assets. Product lines include UCITS funds, mutual funds, ETFs, individual accounts, and insurance assets.

Finadium’s 2021 survey of asset managers in securities lending features a focus on corporate governance: how funds are running their programs, what the right timeframe is for reporting and speaking with agent lenders, and where ESG parameters work in practice. This report provides benchmarking and best practice analysis for asset managers and their service providers.

A principal finding in this year’s survey is the acceptance of risk vs. return by fund managers in securities lending. Revenues are down and inventory is up, but managers view the functioning of the securities lending market as a “well-oiled machine” that causes few concerns; no manager experienced a recent operational difficulty that would have warranted escalation. Managers also agree with the idea that securities lending contributes valuable liquidity to markets, which supports other parts of asset manager business activity.

Asset managers should read this report to learn best practices in running their securities lending programs. Building on this peer-level information, asset managers may opt to take steps to improve their programs, increase their information exchange with their agent lenders, evaluate the value of internal securities lending desks, and mark their competitive positioning relative to other funds. In an era of heightened fee competition between funds, running a productive, risk-adjusted securities lending program can provide a market advantage, so long as it is done well.

Agent lenders, custodians, technology vendors, legal advisors and other service providers may also benefit from this report, as it provides a cross-sectional view of the asset manager experience and buying appetite for securities lending-related services.

A direct link for Finadium subscribers to this report is https://finadium.com/finadium-report-desc/asset-managers-on-securities-lending-2021-a-finadium-survey/

For non-subscribers, more information is available here.

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