November 2021

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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.

Since 2008, Finadium’s regular survey of asset 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.

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.

This report should be read by asset managers and their agent lenders, custodians, technology and legal advisors, and service providers. The report provides useful insights about the present and future of securities lending at asset managers and insurance companies.

Table of Contents

  • Executive Summary
  • Why Ask Asset Managers About Securities Lending?
    • – Methodology
  • Corporate Governance Policies
    • – Frequency of Oversight
    • – ESG and Program Management
    • – How to Measure Success
  • Technology, Data and Transparency
    • – CCPs, Blockchain and Crypto
  • Revenue and Collateral Trends
    • – US and European Fee Splits
    • – Indemnification Thinking
    • – Fund Returns
    • – Collateral Thinking
  • Stability with a Cost
  • About the Author
  • About Finadium LLC

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