BMO Capital Markets, the investment and corporate banking arm of BMO Financial Group, has signed a definitive agreement with Greenwich, Connecticut-based Paloma Securities to hire its global securities lending team and acquire assets used in its securities lending business.

Paloma Securities has offices in Greenwich, New York, Seattle, London and Melbourne, Australia. It is a subsidiary of the Paloma Funds.

"Expanding our securities lending operation fits with our strategy of disciplined growth that focuses on our core clients," says Tom Milroy (pictured), chief executive of BMO Capital Markets. "The addition of this lending team from Paloma Securities complements our existing capability in North America and provides us with a platform to build on for future opportunities in the US and internationally."

S. Donald Sussman, founder of the Paloma Funds, says: "For nearly three decades Paloma has been an innovator in the asset management business. We were the first hedge fund to develop a securities lending capability. Over the past 15 years, Paloma Securities has grown to be a market leader with a global presence. We believe BMO Capital Markets, with its excellent platform and strong balance sheet, is well positioned to expand this valuable business."

The transaction, which is subject to regulatory approval, is expected to close in mid-December. The terms of the deal are not being disclosed.