Private equity firm WCAS to buy securities lending platform EquiLend

EquiLend has found a buyer.

Welsh, Carson, Anderson & Stowe, a $33 billion New York-based private equity firm, has agreed to acquire a majority stake in the securities lending platform, according to a news release Jan. 18.

The terms of the deal were not disclosed, and neither EquiLend nor WCAS responded to inquiries about the purchase price. According to earlier reporting from Fortune citing industry sources, however, WCAS' winning bid was more than $800 million. In addition to the purchase of the majority stake, WCAS has agreed to make a $200 million investment in EquiLend to support future acquisitions and other growth initiatives.

The deal is expected to close in the second quarter and is subject to regulatory approvals.

EquiLend is a key player in the world of securities lending, and its platform sees more than $2.4 trillion in global transactions monthly.

The securities lending platform went up for sale last fall, one month after the banks that founded and own EquiLend — including Bank of America, Goldman Sachs, Morgan Stanley, UBS, and J.P. Morgan Chase — agreed to pay $499 million to partially settle an antitrust lawsuit brought by a group of pension funds in 2017.

In their suit, the pension funds alleged that the banks used EquiLend to run a price-fixing scheme, keeping price data purposefully opaque and stifling competition in order to extract maximum profits at the expense of both borrowers and lenders of equities.

In their settlement, the banks denied any and all wrongdoing and, according to the settlement filing, "maintain that their conduct was at all times proper and in compliance with all applicable provisions of the law."

The lawsuit was led by the $41 billion Iowa Public Employees' Retirement System, Des Moines. Other plaintiffs include the $73.7 billion Los Angeles County Employees Retirement Association, Pasadena, Calif.; $21 billion Orange County Employees Retirement System, Santa Ana, Calif.; and $3.4 billion Sonoma County Employees' Retirement Association, Santa Rosa, Calif.

In addition to the settlement paid by the bank defendants, EquiLend agreed to undergo several corporate governance reforms over the next five years, including limiting the number of board seats held by each bank, appointing outside antitrust counsel, and creating an "Antitrust Code of Conduct" meant to prevent collusion.