2 min readExecutive Summary We set out to answer 10 of the most common questions related to investment policy statement writing for cash portfolios. In doing so, we will provide a number of peer group data comparisons to further add helpful insight in the process. The questions address the following investment subjects: Maximum liquidity limits Minimum credit…
3 min readAs signs of stability returned to capital markets in recent weeks, we’ve begun to hear investors inquire as to how to improve yield in their cash portfolios. We acknowledge that, first and foremost, the return of risk appetite is a welcome and healthy sign after a period of frozen credits and a crisis of confidence….
2 min readOver the last year or so the pursuit of yield, for many corporate treasurers, has been rightfully trumped by the objectives of adequate liquidity and capital preservation. This shift in objectives served treasurers well during the deepest of the credit crisis in 2008 as we saw liquidity and capital threatened like no time in recent…
2 min readExecutive Summary Investment Considerations: Government Sponsored Enterprises Government Money Market Funds FDIC TLGP Guaranteed Debt Foreign Government Guaranteed Debt Beware Certain “Industrial” Credits Institutional cash investors found themselves in a pickle when the market’s desire for safety made treasury securities and treasury money market funds inaccessible. However, when the default option is no longer an…
3 min readExecutive Summary The concurrent use of commingled and separate accounts may help in optimizing corporate cash management. Among corporations, separate account management has a limited following – about 20% in separate account management vs. 76% in money funds and 22% in other funds. Six Advantages of Separately Managed Accounts: Tailored Risk Management Transparency Higher Return…
2 min readThe Aftermath of a Crisis The credit market crunch that started in August 2007 has had a widespread impact on the treasury community’s liquidity management practices. Unlike in any previous market downturns, this credit market crisis started with a popular cash investment vehicle, asset-backed commercial paper, and continued with a system-wide shutdown of another, auction…
1 min readExecutive Summary The auction market relies heavily on investor confidence. Once certain bonds were perceived to be troubled, similar securities, even those with well run programs, may see their auctions at risk. The scenario of a bond ultimately curing itself with a successful auction is unlikely. It is unrealistic to assume that dealers will eventually…
2 min readExecutive Summary Our five core themes for the risk-averse, short-duration, and buy-and-hold corporate cash investor are: Economy and Interest Rates: Looming Recession Risk and Lower Rates Corporate Credit: Battered and Cheapened, but Not Down and Out Market Technical Factors: A Wary Market Short on Liquidity Asset-backed Securities (ABS): Show Me the Collateral Return Expectations: A…
2 min readAmidst the financial rubble brought on by the subprime crisis, might there be havens for cash (aside from under the mattress) for the corporate treasury investor? We think so. First, let’s review what led to the flurry of recent negative headlines. Since last August, there have been large write-downs by financial firms with credit exposure…
2 min readExecutive Summary The concurrent use of commingled and separate accounts may help in optimizing corporate cash management. In corporate cash management, separate account management has a limited following – about 20% vs. 76% in money funds and 22% in other funds. Six Advantages of Separately Managed Accounts: Tailored Risk Management Transparency Higher Return Potential Free…