Treasury management provider HazelTree and Goldman Sachs Asset Management have joined forces to offer financial institutions automated cash management services.
The strategic partnership is in response to the changing regulatory environment for systemically important financial institutions (SIFIs), such as Basel III guidelines on capital requirements and balance sheet composition.
Instead of manual cash transfers with each counterparty, typically the most common practice today, HazelTree and Goldman Sachs will provide an automated, rules-based ‘sweep’ access to solutions managed by Goldman Sachs.
Clients can view all cash balances across their counterparties and can set target rules to optimise those cash balances and investments through the enhanced functionality.
The service is aimed at hedge funds, fund administrators, managed account providers and family offices with.
“Because of these new requirements, banks’ desire to accept or retain short-term cash deposits on their balance sheets has become challenging for SIFIs, and many institutional investors may not be able to keep cash balances on deposit in the same way they have in the past,” said Stephen Casner, CEO of HazelTree.
“As more banks become 100 percent compliant with Basel III, the pressure on hedge funds in particular to find alternatives for their cash — or face deposit limits or higher fees — will only increase.”
“This partnership with Goldman Sachs aims to provide a risk-managed, operationally efficient way for hedge funds to streamline their cash management through an unprecedented combination of visibility into excess cash balances across clients’ various counterparties and automated movement of that cash for easier execution.”
