We see cash as a natural continuum of fixed income and apply the same discipline and rigour to investing cash. At the same time, our experience tells us that cash investors have different requirements which demand that we take a holistic approach to ensure that we can provide clients with the optimal solution to meet these requirements.
Before constructing the optimal solution, or range of solutions, to meet a client’s needs we first understand the key risks incurred when managing cash, and how we can mitigate them. The prominent risks that we consider are credit risk, market risk and liquidity risk. Consideration of these risks and clients’ appetite for each forms a key part in identifying the most appropriate solutions to meet their requirements.
Secondly, it is key that we understand the different sources and requirements of client’s cash, from working capital like cash required for day to day operations to more structural or stable cash balances, or a combination of both. By taking a holistic approach to fully understanding the profile and requirements of cash and cashflows, we can select the most appropriate solutions to meet them in the most efficient manner.