The benefits of segregated mandates when creating liquidity solutions

No two companies are the same when it comes to their cashflow and asset and liability matching needs. Those wanting a more customisable experience and full control over how they manage liquidity may find significant benefits from a segregated mandate.

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The spread of COVID-19 prompted drastic action from central banks and governments across the world. The aim was to limit the long-term economic effects of the pandemic. Monetary policy actions, in particular, have focused on supporting demand, encouraging longer-term growth and boosting confidence by easing financial conditions and ensuring the flow of credit.

Ultra-low interest rates, flat yield curves and diminishing returns are a by-product of these policies, creating a need for companies to exploit opportunities by optimising liquidity management. For corporate treasurers and managers of large cash balances the biggest question remains: how should cash be managed so it remains quickly available yet generates some enhanced return? Every basis point counts, but positive returns cannot be claimed at the expense of capital preservation.

Today, an active management strategy, technologyenhanced cash flow forecasting and diversification across the different levels of risk and maturities available are the best tools investors can use to navigate these challenging times. More investors are discovering that bespoke, segregated mandates are an ideal vehicle for accessing such opportunities to reap the associated benefits.

Important information

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