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Tracking Positions and Forecasting Flows for Efficient Cash Management

By May 18, 2021 No Comments
Tracking positions & forecasting flows for efficient Cash Management

It is vital for hedge fund managers to have enough cash on their books in order to maintain liquidity and manage daily operations like honoring margin calls and posting collateral for certain trades. The continuation of the pandemic has further underscored this importance, leading managers to seek out tools to help them keep a strict track of the cash that they have set aside to be redeployed once the current situation eases.

In the realm of cash management, forecasting capabilities are needed to provide traders and managers with a more holistic view of their cash position and help them remain aware of future inflows and outflows. Based on anticipated activities, managers can execute better decisions regarding the positions that they hold or intend to invest in. For instance, if there is a huge redemption expected in the next 30 days, it would be wise to invest in short-term securities rather than long-term. Similarly, if managers expect a subscription in the upcoming month, they can increase holdings using existing cash and rely on their investments to meet future requirements.

With most hedge funds looking to outsource their operations in an effort to generate alpha, IVP is equipping managers with the tools to help them keep a precise track of their current cash positions and projected cash flows. IVP Treasury’s Cash Management module features analytical dashboards that provide users with a summary-level view of their cash positions and the ability to drill down into different accounts and the positions that make up their cash balances. Balance changes can also be monitored through a designated dashboard, allowing users to compare balances on a day-over-day basis or week-over-week basis with the ability to also select certain date ranges if desired.

Additionally, IVP has developed a feature where users can approve cash balances for the day, which can be edited if there are any issues with the information provided by the custodian or fund accounting system. This helps managers keep a track of their cash positions in a more efficient manner by taking into consideration future cash flow activities as well as current balances – thereby providing them with the underlying information needed to make better and more informed decisions.

To learn more, visit IVP TREASURY or contact sales@ivp.in.

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