Canadian Treasurer

February 8, 2012

SunGard’s cash management investment study highlights growing importance of money market funds for corporate treasurers

NEW YORK--SunGard has completed a cash management study that highlights the growing importance of money market funds (MMFs) among corporate treasurers. As economic and regulatory challenges create greater complexity in managing cash, treasurers have become aware of the importance of defining and delivering on the right investment policies. The survey findings provide insights into corporate cash investment policies and transaction methodologies, attitudes toward risk and return, preferred cash investment instruments, and potential shifts in investment decisions in the future.

Responses were collected from 215 treasurers and cash managers at corporations across a wide range of industries and geographies.  Approximately half of all responses were from companies headquartered in North America, with the remaining split among other regions such as Europe (24%) and Asia (12%). About 70% of survey participants represented large multinational corporations with an annual turnover of $1 billion or more.  Key findings of the report include the following:

• Bank deposits are the most popular investment type for 67% of respondents, followed by MMFs which are used  48% of respondents

• While bank deposits will continue to form the mainstay of corporate investment policy, with more than 60% of respondents noting the importance of bank deposits in the future, this represents a drop by more than 6% from today’s levels

• More than half of the respondents that use MMFs identify them as an extremely important part of their future investment strategy, representing an increase of more than 6%. However, more than half of respondents reported that they do not currently use MMFs

• Among those using MMFs, 37% access them via online portals

Enrico Camerinelli, senior analyst at Aite Group, said, “Finding the appropriate repositories for cash and maintaining access to liquidity are the chief concerns of treasurers today. As bank deposits remain the mainstay, money market fund investments are growing on a global scale. While investors in the US and the UK have great familiarity with money market funds, standard definitions and availability of money market funds in Europe and Asia are now driving increased adoption, especially as fragile economic conditions will demand diversified cash investment policies. As confidence in money market funds grows, companies are likely to look to increase visibility, automation and auditability that online portals offer, particularly when integrated with a treasury management system.”

Bob Ward, chief operating officer of SunGard’s wealth management business, said, “One of the most significant investment challenges faced by corporate treasurers and cash managers today is the ability to forecast cash flow accurately. Market liquidity constraints and the need to gain transparency around counterparty, sovereign and liquidity risks are driving demand for automated solutions. The capabilities of online money market fund portals, such as the SGN Short-Term Cash Management portal, have developed considerably in recent years, providing not only transactions capabilities, but also visibility over fund metrics and asset allocation, as well as risk analysis.”

The SGN Short-Term Cash Management portal is a global, multi-fund trading platform that helps corporate treasurers increase efficiency in researching, analyzing and gathering relevant information to help optimize short-term investment strategies.



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