SunGard’s Global Corporate Cash Investment Report Highlights Shifts in Investment Policies, Instruments and Electronic Dealing

4 November 2014

SunGard has completed its fourth annual Corporate Cash Investment Report, which highlights changes in corporate treasurers’ investment policies, instrument and geographical investments, and transaction execution processes. Based on responses from more than 160 corporations globally, the study examines treasurers’ changing attitudes toward cash investment over the last 12 months, including strategic cash holdings, asset allocation, investment policies and transaction execution. This year, SunGard included foreign exchange (FX) instruments and execution to reflect the integrated nature of treasury policies and processes.

Survey participants represented all regions and industries with 48 percent located in North American treasury centers. With four years of data upon which to build, the report presents the findings from the 2014 survey as well as identifies trends and developments over time. Key findings of the report include the following:

  • Over the past three years, the proportion of companies that have increased their cash balances has grown by 6 percent year over year
  • Given the consistently high and growing cash balances, the lack of suitable repositories of cash was the greatest concern, noted by 31  percent of respondents
  • The proportion of respondents that need immediate access to all cash has fallen from 46 percent in 2013 to 33 percent in 2014, suggesting that treasurers are starting to review and refresh their investment policies and are in a better position to manage a wider range of instruments
  • Bank deposits remain the most commonly used instrument and money market funds (MMFs) remain popular, while variable net asset value (NAV) funds and commercial paper are becoming more popular
  • The use of electronic dealing portals for short-term cash investments remains strong this year at 60 percent

“As the prospect of rising interest rates remains flat, companies that continue to generate healthy cash flows are in a difficult position. Many treasury departments are refining their credit policies and investing in risk management skills to deal with counterparty risk, as well as systems and processes to improve cash flow forecasting. New regulations will create new investment challenges and instruments for corporate treasurers. These clients are preparing for this transition while exploring investment opportunities outside their home markets. Integrated treasury platforms and multi-asset electronic dealing portals will become essential as decision-making and execution develop regionally.” - Vince Tolve, vice president, SunGard’s global trading business

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