Cash & Liquidity Management
Published  10 MIN READ
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Cancelling your Holiday? Think Again

Forget John Grisham and Jackie Collins – this month’s essential beach reading is all about investment. The period which we are in has frequently been referred to as a time of ‘economic uncertainty’ – no-one knows quite what’s happening, what will happen and indeed, in many cases, what has happened. So does this mean that we should forgo our annual jaunt to the beach and be peering at our Bloomberg or Reuters screens instead?

Among the first 20 companies included in the Treasurers’ Benchmark, only one had any long-term investments at all.

In fact, preparing for this article, and indeed the topic of investment in corporate treasury more widely, has been something of a revelation to me. Back in the balmy days when I was in treasury, admittedly of an extremely cash-rich company, we spent every afternoon switching in and out of USD investments – bonds, FRNs but in particular, every flavour of asset-backed security you could imagine: mortgages, credit cards, student loans, car loans. For us, the elements which defined treasury performance were i) cash balances at zero at the end of each day, without the odd collection sneaking in at the last moment, or not coming in at all, and ii) the yield on long-term investments. This is not to say that other priorities weren’t important: counterparty limits, credit ratings and endless investment policy reviews were also scrutinised, but ultimately, yield was what mattered.