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Spanish asset management group GVC Gaesco is committing to creating a new securities lending revenue stream for its Luxembourg-based funds through a partnership with fintech firm Sharegain.
Sharegain promises to provide access to the securities lending market to the likes of small-and-medium-sized asset managers, private banks, high-net worth individuals and online brokers.
Securities lending is a common practice among European asset managers but Spain is currently the only major European economy that restricts securities lending on funds domiciled in its territory.
The Spanish regulatory regime prevents locally-domiciled mutual funds from fully engaging in securities lending, thereby creating a competitive disadvantage compared to offshore fund managers operating in Spain which are not bound by the same rules.
The issue has been raised repeatedly by various stakeholders over the past decade but a lack of unified and consistent market pressure means policy makers are yet to feel the need to bring Spain in line with the rest of Europe.
"We’ve always known that if we want to deliver value, we have to do things differently,” explains Jaume Puig, CEO and CIO of GVC Gaesco Gestión. “So we’re constantly looking for solutions that give a better result for our investors, without compromising on control or transparency.
“Working with Sharegain fully aligns with that vision, a fintech solution that delivers true, quantifiable value for our clients and investors.”
Puig has already outlined plans to extend the partnership to GVC Gaesco’s Spanish funds so they can also benefit from lending revenue.
Boaz Yaari, CEO of Sharegain, states: "We’ve seen a shift among European asset managers. They’re looking for a new approach to securities lending; one that puts them in the driver's seat.
"We are proud to collaborate with GVC Gaesco and deliver greater value to their investors. Jaume and the team have all the qualities we value: cutting-edge leadership, a client-centric mindset and an openness to the benefits that a financial technology solution can bring.”
The partnership follows shortly after news that Citi and Sharegain are collaborating to launch a unique automated SBL solution for wealth managers.
It’s the “first-of-its-kind” fully-automated securities lending solution for the bank's wealth management custody clients, according to Yaari.
