In the first six months of this year the ABN AMRO Global Liquidity Fund grew by more than Euros 1 billion, taking it to Euros 3.2 billion.
The Institutional Money Market Funds Association (IMMFA), of which ABN AMRO was a founder member, recently noted the increasing popularity of triple-A rated money market mutual funds, which offer overnight liquidity and enhanced yields over other short-term investment options, particularly during periods of falling interest rates.
The success of the ABN AMRO GLF is being attributed in large part to the bank’s new Working Capital business, created last year to serve the needs of CFOs and Treasurers. ABN AMRO has broadened its portfolio of liquidity management instruments including the addition of multi-bank sweeping and cross-currency notional pooling.
“This is further evidence that ABN AMRO’s holistic approach to clients’ working capital needs is the way forward,” says Ann Cairns, global head of Working Capital business management at ABN AMRO. “In this instance, by combining our expertise in liquidity management with the investment tools of our asset management team we have been able to provide a superior service to our clients.”
The GLF was created to enable both corporate treasuries and those of financial institutions to make more effective use of the cash element of their working capital. As well as an all inclusive fee structure, clients benefit from online reporting, which will shortly be supplemented by online trading and sweep features. They also benefit from the investment skills of the fund’s expert managers, backed by the bank’s research resources.
“ABN AMRO has a long established and well-respected reputation in this area and the fund has proven very popular amongst our clients,” explains Cairns. “Behind all of our recent initiatives in the area of Working Capital is the desire to give clients control over their cash balances and the GLF is just one way in which we’re doing that.”
ABN AMRO has invested a significant amount of time and effort in creating its Working Capital business, from re-aligning previously separate lines of business to a recruitment drive that saw Phillip Lindow join from JP Morgan to become the bank’s Treasury Manager for Liquidity Services.
“In addition to the GLF we launched a number of liquidity management initiatives following the creation of the working capital business that address the changes taking place in the market at the moment,” says Lindow. For example, clients are increasingly moving away from a multi-bank strategy to consolidate multiple cash balances. To meet this need we introduced multi-bank sweeping as well as cross-currency notional pooling. We are committed to developing our portfolio of services going forward.”
The ABN AMRO Global Liquidity Funds plc (GLF) is an umbrella type, open ended investment company consisting of three sub-funds; the US Dollar, Sterling and Euro Funds, each of which is listed on the Irish Stock Exchange. The GLF provides an excellent alternative to deposits and aims to provide returns consistent with the preservation of capital and liquidity. It invests in short-term quality instruments with the aim if maintaining a net asset value per Institutional share denominated in its base currency.