George Kellner, founder and chief executive of the
event-driven firm Kellner DiLeo & Co., is carving out his
securities lending business as a separate strategy.
Securities lending has historically been an integral part of
the merger arbitrage business, and a handful of brand-name
firms engage in the practice, including Citadel Investment
Group and Paloma Partners. Securities lending operations
enhance traditional hedge fund strategies because they provide
insight into market supply and demand, particularly with regard
KDC's new offering will give investors direct access to the
profits gleaned from the business of borrowing stock from one
or more entities and relending it to others.
Securities lending, also known as securities finance, repo
or stock loan, is the process of lending (moving) securities
from one entity to another. The borrower provides the lender