2 min readA growing number of institutional cash investors seeking higher returns are turning to direct investments in commercial paper. Why? In part because prime money market funds no longer deliver an optimum combination of liquidity, safety and yield as they did in the past. Among other things, the SEC reforms two years ago resulted in a…
13 min readAbstract Many liquidity investors came to know commercial paper (CP) through holdings in prime money market funds (MMFs). We notice higher interest in direct CP investing since the 2016 MMF reform. This paper provides an overview of the market over the last decade and evaluates financial vs. non-financial, U.S. vs. foreign, and Tier 1 vs….
5 min readFollowing the collapse of Lehman Brothers in 2008, the rapidly deteriorating economic environment in the U.S. and abroad caused most treasurers to reevaluate their cash investment strategies, with a specific focus on restricting investment in certain asset types. Some companies implemented these restrictions by changing their investment policies, while others simply gave instructions to their…
10 min readAbstract The evolving treasury cash investment landscape and yield disadvantage of bank deposits have prompted many practitioners to look for alternative options for managing their excess cash. We address this topic in a generalized manner, summarizing three major categories of available cash investment vehicles: deposits, pooled assets and direct purchases. The pros and cons of…
4 min readRegardless of what you might think about cryptocurrencies, blockchain technology represents an undeniable breakthrough in how we manage information. In the last couple of years, interest in the sector has increased materially, with investments by the top 50 VC firms in the field exceeding $600 million in the first half of 2018 alone. It won’t…
2 min readOne of the great lessons we learned from the 2008 financial crisis was that the world is not as safe as we often think. That’s as true today as it was then, even after extensive industry and regulatory efforts aimed at the financial system. Corporate cash investors are confronting a financial landscape that’s even more…
11 min readAbstract Experience has taught us that counterparties can fail with little warning. Counterparty risk management has become more challenging in recent decades due to concentrated exposures, complex financial instruments and evolving bank credit. Corporate and treasury organizations should manage this risk proactively, have an integrated risk policy across business lines, diversify risk by setting exposure…
2 min readInstitutional cash investors haven’t had much time to worry about offshore money market funds over the past several years as they’ve been too busy grappling with all the recent changes to US-based institutional funds. But new developments are making offshore funds more difficult to ignore, especially those involving the implementation of MMF reforms in Europe…
3 min readAbstract Offshore institutional money market funds (MMFs) have largely sat in the periphery for US-centric liquidity investors, but European reform and repatriation of overseas profits may result in transformational changes. Offshore fund investors will have few alternatives other than low volatility net asset value (LVNAV) funds. Public debt funds may not accommodate large inflows. A…
2 min readIn the midst of the recent saber rattling over a potential trade war between the U.S. and China, one salient point has often been overlooked: so far, other than narrowly focused tariffs on steel and aluminum, neither side has taken immediate concrete steps to act on the announcements. The recent tit-for-tat threats from the Trump…