05 February 2018
Fort Lauderdale
Reporter: Zsuzsa Szabo

IMN: shifting trends for beneficial owners collateral preferences


Increasing numbers of beneficial owners globally are moving towards mixed collateral, according to speakers at IMN's 24th Annual Beneficial Owners' International Securities Finance & Collateral Management conference.

Figures provided by DataLend showed that, globally, 41 percent of beneficial owners accepted cash and non-cash collateral in 2017.

Some 35 percent of lender only accepted non-cash collateral last year globally, while cash only collateral made the smallest part of the collateral breakdown last year, with 24 percent.

DataLend highlighted the global revenue earned by beneficial owners stood at roughly $9.22 billion globally for 2017.

North American revenue was more than $ 4.85 billion last year.

DataLend's annual beneficial owners survey conducted in December 2017 showed that beneficial owners’ purpose for engaging securities lending was shifting in line with rising revenues, from merely covering costs to actively seeking alpha. Of those surveyed, 66 percent cited alpha generating as their primary reason for lending assets, while only 35 percent were looking to simply cover costs.

The average lendable in 2017 was valued at $16.6 trillion, according to DataLend.

US-based beneficial owners account for 51 percent of global lendable balance.

Collective investments vehicles constitute 42.1 percent of all US-based lendable balance.

Pension funds come second as the largest group with 26.3 percent lendable.

Government/sovereign entities make 16.2 percent, while insurance companies embody 8.3 percent lendable balance.

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