With interest rates rising and global liquidity shrinking, many asset managers feel there is time pressure on them to improve their overall collateral systems and their securities lending programmes.
“We have spent two years rolling out our collateral roadmap, and it will take two years more before it is complete,” says Roelof van der Struik, Investment Analyst-Manager Treasury Trading & Commodities at Dutch integrated asset manager and pensions specialist PGGM.
“We are building our own plumbing so that we know we can get liquidity when we need it.”
On a practical level, to optimise their securities lending programmes, asset managers are having to make some profound organisational changes, which again take time and effort.
Most important is the integration of various pools of collateral, be they on the securities lending desks, repo desks or treasury desks.
“We are continuing to integrate our desks, so we can optimise collateral management and securities lending, as we want to safeguard liquidity when interest rates start to rise,” says Xavier Bouthors, Senior Portfolio Manager for NN Investment Partners’ Treasury Fixed Income Solutions.