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Alternative Market Briefing

Fidelity launches securities lending platform for fund managers to profit from short-sellers

Thursday, April 29, 2021

Laxman Pai, Opalesque Asia:

U.S. asset management giant Fidelity Investments is opening its internal securities lending platform to third-party asset managers and financial institutions.

The Boston-based firm said the digital platform is for fund managers looking to lend out their holdings to other investors, including short sellers.

The platform, called Fidelity Agency Lending, provides automated lending using an artificial-intelligence loan decision functionality; benchmarking and transparency tools; the ability to customize lending platform parameters; and automated reconciliations with leading global custodians, a news release from the American multinational financial services corporation said.

Fidelity Agency Lending, which is currently responsible for $2 trillion in assets, would now be available to the wider industry.

The platform to the broader universe of mutual funds, ETFs and institutional investors looking to add performance by lending securities to be sold short has helped generate added returns for Fidelity's own funds, said the diversified financial services firm in the U.S. with $10.3 trillion in client asset.

Fidelity's move is the latest sign that the money-management industry, which once dismissed the business as unnecessary and even a bit unseemly, has come full circle. Lending out securities has emerged as an important source of extra revenue, juicing returns and keeping clients from fleeing to cheaper investments.

While the $10.3 tr......................

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