Client Type: Systematic Hedge Fund
Sector: Quant / Macro Strategies
Location: Europe
Challenge:
The fund’s daily liquidity was managed through third-party liquidity funds. Over time, these funds introduced unwanted concentration risk – overweight exposures to sectors the investment team wanted to avoid. In addition, high fees and low transparency created drag and reduced flexibility across portfolio operations.
Solution:
- Conducted a shadow portfolio analysis of the third-party liquidity fund holdings
- Identified that similar (or superior) instruments could be sourced in-house within investment policy constraints
- Designed and implemented an internal Treasury Desk with tailored cash pooling and margin forecasting tools
- Integrated collateral optimisation to reduce friction from derivatives funding cycles
Result:
- Increased short-term yield on idle cash
- Reduced liquidity drag from external fees and suboptimal asset selection
- Gained complete control over cash allocation, with the ability to react to intraday and weekly needs
Value Delivered:
Replaced expensive, misaligned liquidity solutions with a bespoke internal engine – delivering better returns, lower risk, and greater operational agility.