Investment Management

• Investment management


  Handling of financial assets and other investments - not only buying and selling them. Includes devising a short- or long-term strategy for acquiring and disposing of portfolio holdings.
• Investment management

  • Ensuring a company's tangible and intangible assets are maintained, accounted for, and well-utilized
• Investment management

  The process of making decisions about investments. Involves researching, selecting, and monitoring a portfolio of assets that match an investor's goals, risk profile, and timeframes.
• Investment managers


  • Provide expert advice on managing investments for maximum returns by taking into account factors such as liquidity, market conditions, tax implications, and more
• Investment criteria


  Safety of the principal being invested, Maturity and marketability of an investment, Yield
• It would not do to invest company funds in a risky investment in order to earn extraordinarily high returns if there is a chance that any portion of the principal will be lost
• A company policy should limit investments to a specific set of low-risk investment types
• It is best to only make investments where there is a robust market available for their immediate resale
• Yield is truly the last consideration after the previous items have already been reviewed
• Within the boundaries of appropriate levels of risk, maturity, and marketability, the treasurer can then pick the investment with the highest yield
• Since these criteria tend to limit one to very low-risk investments, the yield will also likely be quite low
• Common low-risk, short-maturity, high-marketability investment options

  • Bonds near maturity dates
  • Certificate of deposit (CD)
  • Commercial paper
  • Money market fund
• Earnings credit strategy


  Allows businesses to effectively manage their banking costs while maintaining the liquidity and flexibility necessary for their operations. The earnings credit earned on the average balance is then used to offset various fees and charges associated with banking services.
• Matching strategy


  Matches the maturity date of an investment to the cash flow availability dates listed on the cash forecast
• Laddering strategy


  Involves creating a set of investments that have a series of consecutive maturity dates
• Tranched cash flow strategy


  Requires the treasurer to determine what cash is available for short, medium, and long-term investment, and to then adopt different investment criteria for each of these investment tranches. Cash flows generated from a pool of underlying assets are divided into multiple tranches, each with a different level of risk and return, and different priorities for receiving payments.
• Outsourced investment management

  Shifting cash into a separate account that is managed by outside investment advisors under the terms of a customized investment agreement. Gives the company access to an experienced group of investment managers that presumably uses strong systems of control.
• The fees a company incurs through an outsourcing arrangement can be quite competitive in comparison to the cost of maintaining a similarly experienced in-house staff