130/30 Investment Strategies could generate additional USD 600 Billion of borrowing demand for Securities Lending Industry by 2010
Deutsche Bank today announced that it has released research to its Global Prime Finance clients entitled “Why Securities Lending Matters to the 130/30 Manager… and vice versa”. Deutsche Bank commissioned the research from Spitalfields Advisors, an independent specialist consultancy firm focusing on the securities lending market.
Spitalfields Advisors research highlights include:
- The short sale component of 130/30 strategies requires the borrowing of securities; should the strategy attract the scale of predicted investment1 this could generate an additional USD 600 billion of borrowing demand by 2010.
- The proliferation of 130/30 strategies will create significant additional demand to the existing USD 4 trillion of outstanding equity loans. The increased demand could have a significant impact on the pricing and/or access to borrow in mid tier and hard to borrow securities for 130/30 managers and existing market short sellers.
- Increased demand could transform the securities lending marketplace from an opaque, inefficient market, as the demand for better exchanges linked to a central counterparty will increase and the ongoing hunt for transparency will continue.
- For managers looking to increase their strategies’ short exposure, the selection of a prime broker or custodian to support a 130/30 strategy is a critical decision which may determine the success or failure of a fund.
“An increase in demand for securities driven by the expected growth of 130/30 strategies will have a significant impact on the participants and intricacies within the securities lending industry,” said Anthony Byrne, Global Head of Securities Lending at Deutsche Bank. “We are pleased to deliver Spitalfields Advisors’ compelling research to our clients, and believe it will provide much needed clarity on the subject of securities lending to all parties.”
1The TAAB Group predicts the 130/30 investment strategy, which is currently estimated at USD 140 Billion AUM, could have the potential to grow to over USD 2 trillion AUM in the next three years.
For further information or a copy of the report, please contact
Renee Calabro +1-212-250-5525 firstname.lastname@example.org
Media Relations New York
Stacey Coglan +44 (0) 20 7545 8226
Media Relations London
About Deutsche Bank
Deutsche Bank is a leading global investment bank with a strong and profitable private
clients franchise. A leader in Germany and Europe, the bank is continuously growing in
North America, Asia and key emerging markets. With 77,920 employees in 75 countries,
Deutsche Bank offers unparalleled financial services throughout the world. The bank
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About Spitalfields Advisors
Spitalfields Advisors is an independent specialist consultancy firm and its focus is upon the provision of consultancy services to institutions active, or considering becoming active in the securities finance markets, particularly beneficial owners and asset managers. Spitalfields Advisors assists institutions embarking on securities lending reviews and also analyses existing programmes and suggests opportunities for