1 min readSurvey Goal To shed light on treasury departments’ efforts to mitigate liquidity risk in short-term cash investment, debt and forecasting practices and changes over time. Seven Key Things We Learned From the 2016 Survey Ignoring Bank Exposures Treasury and financial professionals have not materially changed their exposure to Bank Deposits in the wake of significant…
1 min readTwo years ago, the SEC was still deliberating on rules for prime money market funds that eventually resulted in floating net asset values (NAVs), liquidity fees and redemption gates. Basel III reforms affecting bank deposits were still only in the early stages of implementation. But we were already warning clients that the future might require…
4 min readMany people tend to believe that the world of corporate cash investments revolves around two limited choices: bank deposits and money market funds. But several decades ago before the rapid adoption of prime money funds, a third choice—direct purchase and management of marketable securities in separately managed accounts (SMAs)—was routinely used for cash management. After…
2 min readCFOs of emerging growth companies have always faced unique challenges in managing their corporate cash accounts as they juggle multiple rounds of financing, unpredictable burn rates and uncertainty about when products in development will turn into revenue. But in 2016, rising interest rates combined with recent regulatory reforms will make the cash management equation even…
1 min readFor corporate cash managers, planning to reallocate investments in an orderly way as money fund reform approaches may be a common goal, but trying to balance decisions on the utility of government money market funds versus the yield opportunities of a separately managed account can be a conundrum. While the Fed’s December interest rate hike…
1 min readAbstract For institutional cash investors unsure of separately managed accounts in a rising interest rate environment, our scenario analysis suggests that a laddered portfolio of agency and corporate securities with a modest WAM could outperform the government money market fund proxy with negligible unrealized loss concerns in a rising rate environment. Both agency and corporate…
1 min readThe cash management landscape for treasurers changed distinctly from December to January. Behind the equity headlines, short yields jumped to levels not seen in years as the Fed adjusted policy and the short curve steepened. This shift in yields is certainly a welcome event, as the 2016 “to-do” list for many treasurers may include investigating…
1 min readAbstract Greater vigilance is required of today’s treasury investment professionals. Neither bank deposits nor money market funds alone may be appropriate in the post-crisis, post-regulatory environment. As yields start to rise, cash investment strategy decisions that may have been delayed will require serious consideration. Direct purchases in separately managed accounts may become the primary alternative…
1 min readAbstract 2016 will be a year of transition on many fronts for corporate cash investors. The Federal Reserve is expected to remain accommodative in removing monetary stimulus. There will be increased clarity following money market fund reform in October. Credit markets should also manage well through moderate credit deterioration and wider spreads. The primary job…
1 min readFrom our vantage point, 2015 was a terrific year for treasurers. After seven long years, the Fed finally changed the trajectory of short rates, and money market fund reform was embraced as the new reality. As we enter 2016, we are leaving behind the uncertainty of reform and the parsing of the “how, when and…