A new white paper from Hazeltree, a provider of integrated buy-side treasury management solutions, explores the trends and benefits of active treasury management and the increased interest among buy-side firms in implementing a formal treasury function.
The paper analyses the historical trends and the changing regulations leading to the increased focus on active treasury management.
Hazeltree cites several factors affecting the buy-side, particularly hedge fund managers, which are driving the trend toward a much more strategic and active treasury function. They include a focus on counterparty diversification and exposure, increased cost of financing, and increased regulatory demands.
“The value of treasury management has an inverse relationship with the availability and cost of liquidity,” says Sameer Shalaby (pictured), CEO of Hazeltree. “As the market and regulatory environments have evolved in the recent years, active treasury management has emerged as a best practice that is integral to operational efficiency, regulatory compliance, and, for those who manage it effectively, an additional source of alpha.”
The paper provides a detailed description of active treasury management including its principal objectives and the knowledge and resources required to achieve them.
Additionally, the paper highlights the strategic benefits of active treasury management that, based on Hazeltree’s experience, could gain an additional 50-75 basis points of return for a fund.
The paper concludes with a forecast of 2017 trends that will impact the buy-side fund management industry.