Fidelity Expands Internal Securities Lending Platform to Wider Market
What would you like to know
- Fidelity Agency Lending is offered to asset managers and other institutions and can help increase income.
- The securities lending program is one of many examples of Fidelity marketing in-house built capacity.
- Fidelity’s head of global equity trading said this “could dramatically improve the overall returns we deliver to our fund shareholders.”
Fidelity Investments has launched a digital securities lending platform for asset managers and other institutions.
Fidelity Agency Lending, as the platform is called, has been offering these institutions what Fidelity has been doing primarily for its own funds since mid-2019 after leaving Goldman Sachs as manager of its securities lending business and bringing the company internally. The move increased Fidelity’s loan income by about 10% – the fees it paid Goldman; this latest move will add even more revenue for the diversified financial services company, which operates in an environment of extremely competitive fund fees.
âThe current market dynamics are forcing institutions to take a more active role in securities lending programs in order to find a competitive advantage,â said Justin Aldridge, head of Fidelity Agency Lending. âBusinesses are looking for an agent lender with both new technology and the proven ability to serve large, complex institutions, and we are excited to bring it to the market.
Aldridge noted that Fidelity’s lending platform is one of many examples of Fidelity commercializing the use of sophisticated capability that it first established in-house.
David Lane, head of global equity trading in Fidelity’s asset management division, said the loan program “could significantly improve the overall returns we deliver to our fund shareholders.”