Great article in this week’s London Economist (Page 59 Finance and Economics) on the announcement last week by Fidelity who launched two zero-cost tracker funds. For obvious reasons, this sent shockwaves across the investment management industry with key players in this market seeing immediate stock market falls. The article suggests that half of all assets under management today are passive and this latest announcement raises some interesting questions for our industry. In the article, the role of securities lending is highlighted as a source of potential incremental revenue for these funds to compensate for the loss of explicit fees. It is clear that if this trend continues and potentially spreads into Europe, our industry has to be ready to respond to these changing market dynamics. We have seen for some time how the drift towards passive asset management is changing the role of securities lending in the context of alpha performance and these latest developments could accelerate that process.