What’s the lifetime value of securities lending for an asset manager?

It’s easy to get caught up in the day-to-day of capital markets. But the real success stories are behind the headlines, earned through steady, relentless focus. 

At Sharegain, we wanted to understand what returns lenders were making from securities lending, not across months or quarters but across decades. We’ve collated our findings here, analysing one of the most established securities lending programmes in the asset management world: Blackrock’s.

See the infographic

Securities lending is a $2.5tn industry, one that most financial institutions have been unable to access. But a handful of firms have committed, and they’ve seen securities lending become a key part of their revenue. There’s one programme that stands head-and-shoulders above the rest for lifetime value: Blackrock.

Securities lending: The Blackrock way

Blackrock has spent​ 40 years building one of the world’s largest internal securities lending programmes. In fact, they’ve been lending securities since before Blackrock became “Blackrock”.

Since then, they’ve delivered a positive return for every fund that  has taken part.

The last decade has been particularly impressive, rising from $325mn in 2009 to $627mn in 2019. And in Q2 of 2020, they reached new heights, even as AUM held steady. It’s a result any asset manager would be proud of and just the tip of the iceberg of their lifetime earnings. 

There’s just one catch.

Like every internal securities lending operation, Blackrock has incurred huge costs building and maintaining their programme. It’s due to Blackrock’s enormous AUM that they’ve made the cost-benefit trade-off work. 

With Sharegain, every asset manager can unlock the full potential of their AUM, even if they don’t manage trillions.

Ready to start lending your securities?