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Investment Management

Survey: Investment Policies Neglected

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September 15, 2017

A survey from Capital Advisors and Strategic Treasurer reveals investment policies don’t get a lot of attention.

Accounting with BenjaminsMultinationals are getting sloppy when it comes to company investment policy, according to a new survey. This means they haven’t updated them in the last 6 months or in some cases, more than 2 years, says Capital Advisors and Strategic Treasurer, who partnered to conduct the survey.

“Only 23% of firms had made changes to their investment policy in the past 6 months, while 37% had not made any revisions in the past two years,” according to the survey. Ben Campbell, CEO of Capital Advisors Group, says this is a is a missed opportunity.

"Due to the higher interest rates and increase in spread of short corporate notes of commercial paper over treasury, there is significant opportunity for investments out on the curve in asset backed securities, high grade corporate commercial paper, and financial commercial paper,” Mr. Campbell says. This “wasn't present 12 months ago.”

Perhaps highlighting that missed opportunity and lack of attention to the investment policy, the survey also reveals that companies are sticking it out in bank deposits, meaning they are not only leaving money on the table, but they are also putting that money at risk in uninsured accounts. “Forty percent of firms had no policy limits on uninsured bank deposits and 32% had limits that exceeded $10 million,” Mr. Campbell says.

Still, they are keeping an eye on bank deposits as part of their counterparty analysis, according to the survey. “78% of firms were collecting and reviewing their counterparty exposures in aggregate, with the most monitored areas being bank deposits at 61% and credit facilities at 48%,” the survey reveals.

Capital Advisors and Strategic Treasury said their global survey included approximately 130 organizations.

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