Using mutual funds’ securities lending patterns, we identify two lending strategies: value lending (low quantity, high fee) and volume lending (high quantity, low fee). Value lending facilitates short sellers exploiting firm-specific negative information, while volume lending serves general hedging demand. Contrary to the belief that lending decisions occur at the fund family level, we find significant heterogeneity within groups. Volume lenders generate higher revenues, offsetting expense ratios more effectively than value lenders. While volume lenders struggled with collateral management during the 2007 crisis, value lenders have since doubled their risky cash-collateral reinvestment and non-cash collateral compared to volume lenders.