08/12/2013
BOSTON, August 12, 2013 – eSecLending, a leading global securities lending agent, announces the acquisition of the company by Parthenon Capital Partners (Parthenon), a growth oriented private equity firm based in Boston and San Francisco.
Founded in 2000 to provide an alternative approach to securities lending, eSecLending is the largest independent securities lending agent. Their clients include asset managers, pension funds, insurance companies, and corporations, whose combined assets under management exceed $2 trillion. Having auctioned close to $3 trillion in assets since inception, eSecLending is widely recognized as the auction leader in the industry, bringing the only transparent, disciplined and repeatable trading process to securities lending. In the last 12 months, the company was awarded the aiCIO magazine Industry Innovation Award, achieved top rankings in Global Investor magazine’s annual Survey of Beneficial Owners and was named Americas Securities Lender of the Year by CustodyRisk magazine.
As part of the transaction, securities lending industry veteran Craig Starble will co-invest in eSecLending and join as the company’s Chief Executive Officer, adding further depth and industry perspective to the senior management team. Starble was formerly an Executive Vice President and Head of Securities Finance at State Street as well as Chief Executive Officer of Premier Global Securities Lending. Starble states, “I am thrilled to partner with Parthenon and eSecLending. The merits of a boutique, independent service provider have become increasingly evident in the current market environment where clients are seeking aligned interests and value-added, tailored solutions. I look forward to joining the team and collaborating with an innovative company to build upon and execute their strategy and goals.”
Chris Jaynes, eSecLending’s current Co-Chief Executive Officer and one of the founding members of the firm, will remain with the company as President, responsible for client management, strategy and business development. “We are excited about the transaction as it further strengthens our business, preserves our independence and maintains continuity of our management team and key personnel,” says Jaynes. “In addition, we look forward to leveraging Craig’s leadership experience and perspective to further enhance our offering.” Current Co-Chief Executive Officer, Karen O’Connor, had previously announced her plans to retire from the company, effective upon completion of the transaction.
Brian Golson, Managing Partner at Parthenon Capital Partners states, “We are thrilled to partner with Craig and the eSecLending executive team to continue to grow the company. eSecLending is uniquely positioned to help beneficial owners maximize the risk adjusted return from their securities lending program through its unconflicted and differentiated business model.” Zach Sadek, Principal at Parthenon remarked, “After years of research in the securities lending industry and over a decade of effort in the financial exchange sector, we are attracted to eSecLending’s innovative business model as it is well placed to capitalize on the continued changes underway in the market. We are excited to close a transaction with a world-class independent franchise and a talented CEO.”
Financial Technology Partners and FTP Securities LLC (together “FT Partners”) acted as strategic and financial advisor and Kirkland & Ellis LLP acted as legal advisor to Parthenon in connection with the transaction.
Parthenon Capital Partners is a leading mid-market private equity firm based in Boston and San Francisco. Parthenon utilizes niche industry expertise and a deep execution team to invest in growth companies in service industries. Parthenon seeks to be an active and aligned partner to management, either through recapitalization transactions or by backing new executives. Parthenon has particular expertise in business services, financial and insurance services and healthcare, but seeks any service, technology or delivery business with a strong value proposition and proprietary know-how. Parthenon’s investment team has deep experience in corporate strategy, capital markets and operations, enabling the firm to pursue complex, multi-faceted value creation opportunities. For more information, please visit www.parthenoncapital.com.
eSecLending is an independent global securities lending agent providing customized securities lending, auction and collateral management solutions for institutional investors worldwide. The company’s innovative approach has introduced investment management practices to the securities lending industry, offering beneficial owners a compelling alternative to traditional pooled lending programs. Their differentiated process facilitates best execution by utilizing a transparent, disciplined and repeatable process to determine their clients’ optimal securities lending strategy. In addition to outperformance, their approach provides clients with greater transparency and control, allowing them to more effectively monitor and mitigate risks. For more information, visit www.eseclending.com