Asset management treasury teams have a responsibility to provide value on cash
Meet Michael, Portfolio Manager @ Alpha Capital
Alpha Capital, a fictional asset management firm. Michael is constantly seeking innovative ways to enhance client portfolios while mitigating risk. He's particularly interested in strategies that offer a compelling combination of security, liquidity, and competitive returns, especially in the current market environment. He's exploring how ring-fenced collateral structures could benefit his clients.
The Challenge:
Michael manages diverse portfolios for a range of clients with varying risk appetites. He needs investment solutions that:
Offer Enhanced Yields: Ensures the funds are safe and insulated from bank failures or market volatility.
Provide Capital Preservation: Protect client capital from market volatility and counterparty risk.
Offer Diversification: Provide access to a unique asset class and strategy that diversifies client portfolios.
Meet Regulatory Requirements: Adhere to all applicable regulations and reporting requirements.
Offer Enhanced Yields: Ensures the funds are safe and insulated from bank failures or market volatility.
Provide Capital Preservation: Protect client capital from market volatility and counterparty risk.
Offer Diversification: Provide access to a unique asset class and strategy that diversifies client portfolios.
Meet Regulatory Requirements: Adhere to all applicable regulations and reporting requirements.
The Outcome
By utilising the secure deposit service, Michael can:
Offer Differentiated Products: Provide his clients with access to a unique investment strategy that enhances returns while mitigating risk.
Attract New Clients: The innovative nature of the offering can be a key differentiator in a competitive market.
Enhance Client Relationships: Demonstrate his commitment to finding the best solutions for his clients' needs.
Improve Portfolio Performance: Generate potentially higher risk-adjusted returns for client portfolios.
Streamline Operations: Leverage the service provider's expertise and infrastructure to manage the complex aspects of the repo market.
By securing the deposit and lowering the overall risk, Michael was able to increase his counterparty and duration exposure limits to place a greater balance with more choices of tenor than was possible with unsecured cash deposits placed with the same institution.
Offer Differentiated Products: Provide his clients with access to a unique investment strategy that enhances returns while mitigating risk.
Attract New Clients: The innovative nature of the offering can be a key differentiator in a competitive market.
Enhance Client Relationships: Demonstrate his commitment to finding the best solutions for his clients' needs.
Improve Portfolio Performance: Generate potentially higher risk-adjusted returns for client portfolios.
Streamline Operations: Leverage the service provider's expertise and infrastructure to manage the complex aspects of the repo market.
By securing the deposit and lowering the overall risk, Michael was able to increase his counterparty and duration exposure limits to place a greater balance with more choices of tenor than was possible with unsecured cash deposits placed with the same institution.
How it works
1. Pooled Client Funds
2. Ring-Fenced Collateral
3. Wholesale Repo Market Access
4. Enhanced Yields
5. Liquidity Management
6. Diversification
7. Transparency and reporting
2. Ring-Fenced Collateral
3. Wholesale Repo Market Access
4. Enhanced Yields
5. Liquidity Management
6. Diversification
7. Transparency and reporting
In Summary
For Alpha Capital, secured deposit service with ring-fenced collateral offers a valuable tool for enhancing client portfolios, attracting new assets, and solidifying their position as a leading asset manager. It allows Michael to offer a sophisticated investment strategy that balances security, liquidity, and return, ultimately benefiting his clients`.
'Alpha Capital, a fictional asset management firm is constantly seeking innovative ways to enhance returns on client portfolios while mitigating risk.`
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Cash deposits fully secured.
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