Pension fund launch group to support peer-to-peer securities lending

Four leading North American pension funds helped launch the Global Peer Financing Association to advance peer-to-peer securities lending by asset owners, the group announced Thursday.

Pension funds – the $396.9 billion California Public Employees’ Retirement System, Sacramento, the $94.1 billion ($72 billion) Healthcare of Ontario Pension Plan in Toronto, the Ohio Public Employees Retirement System of $100.2 billion, Columbus and the State of Wisconsin Investment Board in Madison, which manages $118.5 billion in assets, including Wisconsin’s $107.9 billion retirement system – has partnered with eSecLending, Osler, Hoskin & Harcourt and Credit Benchmark to create GPFA, to make the peer-to-peer trading activity of asset owners easier and more efficient.

For the heads of the four founding pension funds, peer-to-peer transactions have resulted in increased revenue and liquidity, CalPERS Chief Investment Officer Dan Kiefer said in a group statement. Other benefits include diverse peers, lower costs, increased transparency and demand predictability, said Christopher Benish, chief analyst at SWIB.

OPERS Senior Portfolio Manager Jerry May said the new framework will help asset owners with limited internal resources to assess alternative counterparties and navigate the approval process as well as administration in Classes.

“GPFA can serve as a central collection point for the buy-side community,” said Rob Goobie, assistant vice president of collateral, derivatives and fixed income management at HOOPP.

Membership is open to all asset owners and managers.