IMN: Client demands changing due to “more holistic view” of sec lending
14 September 2022 UK
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The view of the securities finance and lending sector is altering as clients are beginning to see the industry in a much more holistic way, according to Brooke Gillman, eSecLending’s managing director and head of client relationship management.
Gillman made the comment in a panel entitled “Exploring Collateral Management, Optimisation Strategies & Risk Management” at the IMN European Beneficial Owners’ Â鶹´«Ă˝ Finance & Collateral Management Conference, held in London.
A number of industry members also took part in the panel discussion, including State Street’s senior managing director and global head of collateral management Staffan Ahlner, co-founder of Credit Benchmark Mark Faulkner, and AustralianSuper’s associate manager of securities finance and collateral, Trevor Amoils.
Also on the panel was Samir Dhrolia, senior managing director, global derivative, trading and index portfolio management at British Columbia Investment Management Corporation.
During the group discussion, eSecLending’s Gillman highlighted the changing client demands circling optimisation. She said: “If everyone in your ecosystem is operating in the same way, then you are not going to get a great result. That is what happens in a dynamic market.
“Where 20 years ago, securities lending was a very straightforward product that was going to add some incremental return, we are now seeing a lot of plans that look at securities lending with a very different risk lens, because they are using it differently.”
The panel also identified a trending theme across the market globally, where firms are looking to take over as the decision making authority, instead of turning their programme over to an agent, especially in terms of larger and sophisticated asset owners such as AustralianSuper.
Gillman added: “Every counterpart is taking a different approach to how they are solving their own capital constraints. The solutions that they are putting forward — the transactions and the trade opportunities that they are presenting to clients — is like trying to match two different puzzle sets.”
Looking at non-traditional counterparts, Gillman is seeing many eSecLending clients “face-off” to one another, recognising that there are a lot of transactions that would have been achievable with traditional bank broker-dealer counterparts for years.
“Those opportunities now are either less optimal going back to optimisation, or they are just not available to them,” Gillman concluded.
Gillman made the comment in a panel entitled “Exploring Collateral Management, Optimisation Strategies & Risk Management” at the IMN European Beneficial Owners’ Â鶹´«Ă˝ Finance & Collateral Management Conference, held in London.
A number of industry members also took part in the panel discussion, including State Street’s senior managing director and global head of collateral management Staffan Ahlner, co-founder of Credit Benchmark Mark Faulkner, and AustralianSuper’s associate manager of securities finance and collateral, Trevor Amoils.
Also on the panel was Samir Dhrolia, senior managing director, global derivative, trading and index portfolio management at British Columbia Investment Management Corporation.
During the group discussion, eSecLending’s Gillman highlighted the changing client demands circling optimisation. She said: “If everyone in your ecosystem is operating in the same way, then you are not going to get a great result. That is what happens in a dynamic market.
“Where 20 years ago, securities lending was a very straightforward product that was going to add some incremental return, we are now seeing a lot of plans that look at securities lending with a very different risk lens, because they are using it differently.”
The panel also identified a trending theme across the market globally, where firms are looking to take over as the decision making authority, instead of turning their programme over to an agent, especially in terms of larger and sophisticated asset owners such as AustralianSuper.
Gillman added: “Every counterpart is taking a different approach to how they are solving their own capital constraints. The solutions that they are putting forward — the transactions and the trade opportunities that they are presenting to clients — is like trying to match two different puzzle sets.”
Looking at non-traditional counterparts, Gillman is seeing many eSecLending clients “face-off” to one another, recognising that there are a lot of transactions that would have been achievable with traditional bank broker-dealer counterparts for years.
“Those opportunities now are either less optimal going back to optimisation, or they are just not available to them,” Gillman concluded.
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