In November we broke the news that Rory Zirpolo was joining Kellner DiLeo & Co. Here we speak with Zirpolo about his 25 years in the business, the current state of the industry and the challenges ahead at Kellner DiLeo.
Image: Shutterstock
In November we broke the news that Rory Zirpolo was joining Kellner DiLeo & Co. Here we speak with Zirpolo about his 25 years in the business, the current state of the industry and the challenges ahead at Kellner DiLeo.
SLT: With your experience in the industry what would you see as being the most important lesson to have been learnt from the past couple of years?
Zirpolo: The most important lesson I’ve learned is that there is no substitute for individual commitment to the group effort. Over the past several years I’ve been fortunate to have been able to hire, train and motivate a team of professionals with a single common goal: To expertly source equity securities at optimum rates in cooperation with our supply counterparts.
SLT: For those of us who are not too familiar with Kellner DiLeo can you share a brief history?
Zirpolo: Sure. Kellner DiLeo & Co. (KDC) was founded by George Kellner in 1981 originally as a merger arbitrage partnership. Upon registration as a broker-dealer in 1983, KDC entered the securities lending space to serve as an adjunct to the merger arbitrage strategy. In 2002, KDC expanded its investment offering to include a distressed & high income portfolio. In 2009, KDC management launched a matched book securities lending partnership to take advantage of the business’ unique return profile.
SLT: What sort of presence does Kellner DiLeo have in the industry? What are its ambitions?
Zirpolo: Kellner DiLeo is known as a nimble player within the hard-to-borrow side of the securities lending business. We have relationships with most of the larger participants in the industry, so we like to be known as a group that hits above its weight. The firm has been in business for nearly 30 years, so both it and George Kellner are highly regarded in the financial community.
SLT: Tell us about the role you are taking on at Kellner DiLeo?
Zirpolo: The focus of the team is to support our borrower and lending clients in achieving their goals: to the extent they are successful KDC will prosper and grow. As manager of the team I’m tasked with furnishing the members with the best technology, information and strategies required to achieve our client goals. These strategies include: building our counterparty network and growing the asset base of the fund.
SLT: Over the past 12 months there has been a lot of talk about CCPs as the way forward. What is your take on this?
Zirpolo: For any type of a CCP model to work, there needs to be an emphasis on liquidity. It doesn’t appear that any CCP model or platform has been able to accomplish this. A trading platform that has accomplished this, although not a CCP, is EquiLend.
SLT: Where do you see the industry’s key growth areas to be in 2011?
Zirpolo: On the equity side, non-GC (General Collateral) transaction flow. On the international side, we are focused on Asia and especially Hong Kong as a base to access the emerging markets (eg, Korea, Taiwan, and mainland
China).
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