It’s safe to say that if you ask local authority treasury staff what kind of company Arlingclose is, they’ll respond quickly and correctly that we advise on treasury management. Not surprising, since we have provided treasury management and other financial services to around 250 local authorities since 2004.
However, less well known is the fact that we provide services to a range of different sectors. For instance, we’ve:
- Advised charities on the investment of short, medium and long-term cash balances
- Arranged £450m of loan facilities for housing associations.
- Helped Electronic Money Institutions (EMIs) invest their client money across euro, sterling and US dollar-denominated regulator-approved securities.
- Performed credit risk analysis and valued illiquid assets for public and private sector pension funds.
- Advised companies on the subsidy control regime (and prior to that state aid regime) when taking loans from local authorities.
- Restructured over £2bn of structured debt and advised PFI/finance lease SPVs on restructuring debt with local authorities.
The underlying theme in all our services is our knowledge of financial markets and treasury risk management, experience in delivering a wide range of financial services and our contacts across firms and sectors. A few examples on our services to these varied clients are below:
A recent new EMI client previously held all its client money in a single bank account. Apart from the credit and operational risks of maintaining such a treasury position, the level of income derived from a sizable cash balance was much lower than if it was invested in other areas. Arlingclose assisted in investigating alternative investment options under regulations for client money, setting up custody and dealing relationships, drawing up procedures and policy, and providing ongoing advice on investments, market intelligence, and credit risk over three main currencies. The new framework led to superior risk adjusted returns; an additional £2m a year in income, while significantly lowering credit risk.
One of our larger charity clients manages over £500m in cash balances and requires a mixed investment strategy to manage risks around cash flow uncertainty while maintaining a required budgeted level of income to support other areas. Alongside continual monitoring of counterparty risk and financial market activity, we hold monthly meetings, outlining our views on interest rates, present a detailed review of individual counterparty strength and discussing the appropriate strategy to meet the charity’s requirements given current risks and opportunities. We also present to their treasury committee on a quarterly basis.
Another, smaller charity identified that it had long-term cash balance necessary for investing to support income generation over time. We advised on the division of the portfolio to liquidity, medium-term and longer-term balances, and sourced investment funds that met the charity’s ethical requirements, particularly with regard to health and the environment. Reporting quarterly on the portfolio’s performance, we also advised on divestment strategy when the underlying needs of the charity changed, securing substantial capital gains.
We’re always interested in discussing problems facing clients and providing solutions that cut costs/increase returns, while mitigating potential risks.
For further information, please contact Arlingclose on either treasury@arlingclose.com or nkeeling@arlingclose.com.
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