New CEO Sets Diversified Course for eSecLending
(September 18, 2013) — Craig Starble, the newly appointed CEO of eSecLending, intends to expand the range of services on offer to the company’s clients.
“We have the opportunity to add business around collateral transformation services and collateral optimisation,” Starble told aiCIO, “and unlike some of the large custodian banks, we are independent and unconflicted. We know there is not just one solution for one problem.”
eSecLending, which was acquired by private equity group Parthenon Capital Partners this summer, was established as an agent lender of investors’ securities to third parties in 2000. Starble, who was brought in as CEO as part of the acquisition, sees the company’s role in the sector growing.
“We don’t yet know what a lot of the new regulation will mean for us or our clients, but we predict that agent lenders will have to manage a greater part of the process between the lender and the borrower—and the services that come with that.”
As an independent, dedicated company, Starble believes eSecLending has the edge over its larger banking rivals, in which all teams are fighting for technology, research and development budgetand time from their legal and compliance departments.
“We are careful not to develop everything and anything—and certainly not in advance—we will wait and be led by what our clients want and need from us.”
Starble led State Street’s global securities lending team for five years until 2009 when he left the company and attempted to launch his own independent lending agent. Several of his former State Street team—who left to join him a year later—had already joined eSecLending.
“I was convinced the industry needed more third party providers—I just couldn’t secure the capital to launch one. Parthenon, which is a specialist in financial services, wanted to get involved in this sector, but they did not want a new launch; this opportunity made sense to them.”
The new CEO is also optimistic that the client base, which fell from record levels in 2007 as the financial crisis hit, will remain relatively consistent as investors see good performance.
“General collateral [relatively liquid, commonly traded securities] is not likely to expand, but that is not really our market. Intrinsic lending, however, is on the rise and our auction process works well with highly specialised equities portfolios.”
He added that the auction process could be transferred to other parts of eSecLending’s diversifying business, and the industry more widely.
“Being a utility, we can think about things in a different way. There is a culture of innovation and willingness to be creative.”
Related content: Private Equity Buys eSecLending as Veteran Takes the Helm & Sec Lending: Risk Appetite Rising in Collateral Reinvestment