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Guy d'Albrand, RBC Investor Services, interview
03 August 2012
Guy d’Albrand, head of securities lending at RBC
Investor Services, talks to Stephanie Baxter about his
plans for the business and why Europe should look to
Japan for answers
RBC Investor Services
Just seven months into his role with RBC Investor Services, Guy d’Albrand has already embarked on a major revamp of the bank’s securities lending department. He joined from Societe Generale, where he first started his career in 1988. He was at the forefront of the development of the Japanese derivatives market and oversaw the launch of the bank’s derivatives brokerage unit in Tokyo.
Having lived in Japan for several years during the 1990s, d’Albrand has had first-hand experience of the collapse of the asset price bubble and the ensuing crisis. He also acted as CEO of Newedge Japan for a couple of years before eventually leaving the country in 2002. Native French-speaker d’Albrand speaks English, Japanese and Russian.
How is your business reacting to the changing demands of beneficial owners?
We’re focusing more and more on our fixed income activity, as well as continuing with our equity activity. We aim to expand our capabilities in fixed income because as we see a decline in the opportunistic value of equities. We’re also noticing growth in value for government bonds and well-rated, liquid and marketable corporates.
The first step is for us to be more proficient in fixed income to extract additional value for our clients. The second step will be to engage more with beneficial owners to examine the possibility of putting in place specific trades that will extract and capture additional value from their assets. We’ll therefore be looking for mandates from different segments of customers to lend, maybe not only overnight, but also see if there are opportunities for them to lend on a more structured basis.
There’s also a lot of value to be generated around corporate events – there are different ways of obtaining it. In order to capture these opportunities we are looking to enhance the way we intervene in the markets. Our beneficial owners are in favour of such a search for additional value. All of this will be done with full transparency to the lender – this is a core principal we will not be changing.
Lending volumes are still relatively low. How well would you say the market is functioning?
At times, there is a slight disconnect between borrowers and lenders. We need to help align the terms of the beneficial owners and borrowers more around what they would prefer to lend or borrow. We need to engage more with both sides to help find more interesting trades for the beneficial owners.
This will be achieved by moving from a borrower-focused strategy to a flow-and-inventory strategy. Up until now we have been mainly looking for ways into the market and it’s time we adopted this new approach, which looks at both borrower and lender sides simultaneously. It’s a more dynamic way of pushing the assets into the market. I faced the same issues when working for Newedge Japan, where we wanted to move from being a plain vanilla broker into creating value-added trades for our customers.