A basic right...
You have the right to lend out any asset you own, including the securities in your portfolio. However, for decades this practice, known as securities lending, has largely been restricted to institutional investors who have reaped the rewards.
Whether you were given the opportunity to enjoy this additional revenue stream, or you decided not to engage in it due to the lack of control and transparency over your portfolio, we have a solution for you! Now you too can earn additional revenue by lending out the securities you already own.
Securities lending is a pure alpha solution which can help you:
The smart way to lend
You may have been aware of securities lending for some time and therefore aware of the revenue opportunities it presents. But, the industry was a black box and you didn’t have the time or money to manage it yourself so, in the end, you passed on introducing securities lending.
Pass no more!
When you activate Sharegain, you are not defined by the size of your portfolio.
If you like control, you’ll love Sharegain
- Set your lending limits on each of your securities or at a portfolio level.
- Manage who your borrowers are.
- Choose to only lend your most lucrative securities.
- Get real-time access to the lending rates on your securities.
- Allow your whole team access for effective oversight of the lending activity.
- Approve each of your loan’s individually.
Time is your most valuable commodity
- Define and set your own control framework and let our tech work for you.
A brief history of securities lending
Institutions who provide “market making” services are required to buy and sell securities at any time. Sometimes a market maker may not hold enough of a security at the time when a client wishes to sell it. This requirement was what lead to the first securities lending transaction.
In the 1970s, US custodian banks began lending specific securities to broker-dealers on behalf of their clients.
In the 1980s securities lending was adopted by many institutional investors as a way to offset custody fees. Wider adoption was aided by legislative changes and standardisation.
Many regulators sought to address the legal, regulatory and tax impediments to securities lending. As authorities reduced the scope for activities such as tax arbitrage, hedging became the main demand driver of the industry.
During the 2000s and following increased adoption and standardisation, specialist providers of securities lending services known as agent lenders began facilitating securities lending transactions.
Sharegain reinvented the agent lender model, creating the world’s first Digital Agent Lender, opening up securities lending for all investors and making it accessible by focusing on simplicity, automation, and seamless integration.
The value of securities lending
As part of our mission to demystify the securities lending industry we want all of our clients to understand what drives the hidden value of their portfolio.
Broadly, revenues from securities lending are driven by four main pillars.
These are usually hard to borrow securities which borrowers are willing to pay >1% for.
Corporate events create trading opportunities increasing the demand to borrow.
Borrowers are willing to pay more to lenders who forgo the right to recall.
These securities generate lower returns but can be lucrative in volume.
The hidden value of your portfolio
Specials vs. General collateral
At Sharegain we focus on the returns that can be generated
from the special portion of your portfolio. This is because
specials provide the most attractive risk/return.
At Sharegain we focus on the returns that can be generated from the special portion of your portfolio.
This is because specials provide the most attractive risk/return.