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Equilend : EquiLend 10th Anniversary
equilend – 10 yeaRS of innovaTion 16 The industry is battling to restore lending and revenue levels to those of 2008 and earlier. Financial journalist Hugo Cox looks at how today’s regulatory and commercial environment will define the industry over the next decade “I cannot confirm the data that there is less revenue in the market today,” says Fred Nadd-Aubert, global head of securities lending marketing at Credit Suisse. “Hedge fund assets are back up to $2tn, where they were before the crisis. Certainly, we have seen some spread-compression recently, but we’ve seen increased flows over the past three years.” While most participants accept that revenues are down a little, they say that they have not dropped as much as was feared. This is partly because there are fewer players: Lehman and Bear Stearns’ share of the pie has been redistributed. But lenders have established a floor below which they are not prepared to do business. In addition, there has been a focus on special situation lends and the rates on general collateral business have held up well – all despite a tough low interest rate environment. suppLy rETurns Supply levels, meanwhile, are high. A large proportion of beneficial owners have returned to the market since leaving during the financial crisis. Driven by the search for yield in the current low interest rate environment, pressure on all sections of the market – pension funds, insurance companies, asset managers, central banks and sovereign Charting the road ahead EL.indb 16 26/08/2011 09:55