The New Era of Cash Management

October brought a string of articles in the Wall Street Journal and other financial publications highlighting the impact money market fund reform and liquidity coverage ratios may have on corporate cash investments. The gist of these articles was that after years of little environmental change, treasurers are now faced with significant modifications to both prime money market funds and deposits, two of the most widely used tools in the treasurer’s investment tool box. This subject was also central to the educational session I moderated at the annual AFP conference in Denver last month. The goal of the AFP session was to raise awareness of the critical timelines treasurers face and to understand how the panelists were preparing for the changes.

Realigning one’s cash investment program to account for the regulatory changes may be a two-step process: first, realign cash outside of the wake of money fund reform, and second, explore and implement a post-reform cash investment program that is individually tailored to one’s particular liquidity needs. There are many issues to consider as one retools, from investment policy modifications to the types of investment strategies that can be employed. These are issues we have deeply explored over the years as we have implemented more than a thousand cash investment programs for corporate treasurers.

As a helpful resource to treasurers exploring post-money fund reform options, we have published a book – “The New Era of Cash Management” – compiling a dozen relevant whitepapers and providing a guide to decision making from our research and portfolio management team. This unique resource explores in detail many of the strategy and risk management challenges treasurers face in this new era. For a hard copy of the book, please email Shane Fierman at sfierman@capitaladvisors.com.

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Best Regards,

Ben Campbell
President & CEO