CSOP Asset Management has partnered with Citi to loan out its global equity portfolio through Citi’s agency securities lending business.
The partnership highlights a growing trend of Asian asset managers turning to securities lending as an additional source of income.
“Securities lending is a natural evolution for CSOP Asset Management as we look to enhance the returns on the assets held within our fund structures for investors. The partnership with Citi Agency Lending is a key step in assisting us with that goal,” said Chen Ding, CEO, CSOP Asset Management.
CSOP is the largest RMB Qualified Institutional Investor (RQFII) manager, holding the largest quota of RMB 46.1 billion, as of June 2017, accounting for 8.5% of the total RQFII quota granted globally.
It also manages more than $4.5 billion in asset under management, as of 2017, based in Hong Kong, Mainland China and the US, and is one of the key exchange traded fund (ETF) providers in Hong Kong.
The mandate is the latest securities lending win for Citi in the Asia-Pacific region.
Last year, it was selected by the Korea Securities Depository (KSD) to offer Korean securities companies, fund managers and other financial intermediaries the opportunity to lend their securities to drive higher returns on idle asset holdings.
Citi started with one of its key clients in the country, Shinhan Investment Corp, a leading local brokerage firm that held $570 billion of global equities.
“The partnership [with CSOP] is testimony to the growth of securities lending in the investment management space,” said David Russell, head of prime, futures and securities services, Asia and Hong Kong, Citi.
“We are delighted CSOP Asset Management has chosen Citi to help them achieve higher returns for their funds.”
Elsewhere, in October Citi was chosen by JP Morgan Asset Management in October as its securities lending agent for $325 billion of lendable assets, which include ETFs and 40’ Act funds.