eSecLending announced today that it had completed a securities lending auction of U.S. equities for the California Public Employees’ Retirement System (CalPERS) worth $48 billion.
Exclusive borrowing rights to the securities were auctioned using eSecLending’s web-based platform, eSecAuction. Four major financial institutions submitted winning principal bids in the auction, which was held on December 4 last year. They include Credit Suisse First Boston (CSFB), Deutsche Bank Securities Inc. and Lehman Brothers Inc. CalPERS also awarded assets to Metropolitan West Securities on an agency basis.
“The success of the December U.S. equity auction provides CalPERS with a strong base for 2003,” says Curtis Ishii, Senior Investment Officer for CalPERS Global Fixed Income program. “The winning bids have locked in excellent, dependable returns for our public employees and their families. The auction process has proven that it can consistently deliver premium returns to our beneficiaries and efficiently match our assets with multiple borrowers.”
eSecLending says it is pleased with the strong level of interest and participation from the borrowing community. “This mandate highlights CSFB’s continued commitment to its hedge fund and money management clients,” says Art Mbanefo, Managing Director of CSFB and the Global Head of CSFB’s Prime Banking Department.
“CSFB’s Prime Banking business is a major growth area for the firm. One of the central points to building this franchise is securing stable supply for our hedge fund clients. CalPERS’s pension fund members are the clear winners as they continue to realize superior value for their domestic equity assets. This represents the third consecutive year that CSFB has been awarded CalPERS assets through the auction process. We are very pleased to have won such a significant portion of the assets and to continue our relationship with CalPERS.”
“Lehman Brothers Prime Brokerage Services continues to commit our strategic resources to ensure a stable supply of inventory for our Hedge Fund clients,” adds Jeff Dorman, Managing Director and Global Head of Lehman Brothers Equity Finance. “We are extremely pleased with our ongoing relationship with CalPERS and eSecLending. The Auction process ensures the appropriate level of transparency and has consistently proven to be a valuable medium for Lehman Brothers.”
eSecLending also announced today that it had completed a second auction for CalPERS of $7 billion of international equities for Five major financial institutions submitted winning bids in the December 11, 2002 auction, including Credit Suisse First Boston (CSFB), Deutsche Bank Securities Inc., JPMorgan and Lehman Brothers Inc. CalPERS also awarded assets to Boston Global Advisors on an agency basis. Exclusive borrowing rights and agency awards expire after 12-month terms, after which rights to the securities will be re-auctioned.
“The principal auction model continues to be very successful for our International equity portfolios,” explains Curtis Ishii, Senior Investment Officer for CalPERS Global Fixed Income program. “Once again, we were able to maximize the return on our International assets by awarding the various portfolio segments to multiple principal borrowers, which ultimately benefits our public employees and their families. We were pleased to incorporate new bidders into the auction process and a new winning borrower into the program. eSecLending’s team continues to manage the auction process and subsequent implementation and administration phases in a seamless and efficient manner.”
“2002 was an excellent year for eSecLending,” concludes Susan Peters, Chief Executive Officer of eSecLending. “We successfully auctioned over $100 billion in U.S. and foreign equities and fixed income securities, added talented professionals to our team, expanded into the mutual fund market and made significant improvements in operational efficiencies. Based on current levels of market interest, we’re enthusiastic about our prospects both in the U.S. and the Europe during the coming year. We’re confident that we’ll see solid new business growth in 2003.”