by Neil Hutchison, Executive Director, J.P. Morgan Asset Management
Corporate investors are no strangers to the complex market issues that are encumbering decisions on how to invest surplus cash. Negative interest rates are creating particular challenges, and it becomes difficult to counteract these issues using the most familiar and popular cash investment instruments. Although the past two years have witnessed an increase in M&A activity, corporate cash reserves remain at a record high. At the end of 2013, for example, the top thousand public, non-financial companies were holding $3.53tr. (source: The Cash Paradox, Deloitte LLP) with no considerable change since then. Given the scale of investment challenge experienced by many corporations, treasurers are now starting to look beyond traditional cash investment instruments and find out what choices and opportunities they have to boost returns within a controlled risk framework.