SunGard’s Cash Management Investment Study Highlights Growing Importance of Money Market Funds for Corporate Treasurers

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SunGard has completed a cash management study that highlights the growing importance of money market funds (MMFs) among corporate treasurers.

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.

About the SunGard Global Network
A trade automation and connectivity solution, the SunGard Global Network links institutions throughout the financial services value chain, offering services for equities, fixed income, listed derivatives, mutual funds, money market funds and other cash equivalents. SGN helps automate the entire trade lifecycle, from order execution through to post-trade processing. It facilitates trading on over 120 markets worldwide and links more than 2,000 asset managers with over 530 brokers, as well as interconnecting with major third-party order-routing networks. SGN’s international connectivity hubs also support low-latency market data delivery from global markets.

About SunGard
SunGard is one of the world’s leading software and technology services companies. SunGard has more than 17,000 employees and serves approximately 25,000 customers in more than 70 countries. SunGard provides software and processing solutions for financial services, education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue of about $4.5 billion, SunGard is the largest privately held software and services company and was ranked 434 on the Fortune 500 in 2011. Look for us wherever the mission is critical. For more information, please visit http://www.sungard.com.

For more information, email sungardpr(at)sungard(dot)com.

SGN Brokerage Services offered in the United States and Canada are provided by SunGard Institutional Brokerage Inc., Member FINRA/SIPC

SGN Brokerage Services offered throughout Europe, the Middle East, Africa and Asia Pacific are provided by SunGard Global Execution Services Limited which is authorised and regulated by the Financial Services Authority, No. 469919 • Incorporated and registered in England and Wales No. 3127109 • Registered Office: 25 Canada Square, London E14 5LQ.

SunGard Global Execution Services Limited (ARBN No. 132 508 742) is exempted from licensing under Australia Securities & Investments Commission Class Order 03/1099 and is regulated by the Financial Services Authority under UK laws, which differ from Australian laws.

Trademark Information: SunGard, the SunGard logo and the SunGard Global Network are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.

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Adriana Senior
SunGard
718-578-1130
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