Goldman Sachs Asset Management, HazelTree Form Treasury Management Partnership

Dec 16 2015 | 8:24pm ET

Goldman Sachs Asset Management and treasury management specialist HazelTree have inked a strategic partnership that aims to assist hedge funds, fund administrators, managed account providers and family offices in improving cash management. 

The partnership is in response to the changing regulatory environment for systemically important financial institutions (SIFIs), particularly Basel III guidelines on capital requirements and balance sheet composition, according to a joint statement. 

“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% 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. 

“The partnership with GSAM 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,” he continued. 

Instead of manual cash transfers with each counterparty, typically the most common practice today, the partnership between HazelTree and GSAM will provide automated, rules-based “sweep” access to solutions managed by GSAM. Clients such as hedge funds, fund administrators, managed account providers and family offices will have a comprehensive view of all cash balances across their counterparties, and can set target rules to optimize those cash balances and investments through enhanced functionality.

“As HazelTree sought ways to enhance their platform with new, industry-leading technology, we were pleased to partner with them” noted James McNamara, managing director and global head of third party distribution for GSAM. “We have a long history of managing cash for hedge funds and other institutional investors, and we believe this new relationship with HazelTree will make cash management that much easier, as certain institutions are increasingly asked to find alternative investment options for their cash balances.”

GSAM’s global liquidity management team provides money market and short duration fixed income solutions with more than $277 billion assets under management as of September 30, 2015.

Founded in 2009, HazelTree offers comprehensive treasury management solutions for hedge funds, fund administrators, managed account providers and family offices. The firm’s integrated platform includes comprehensive cash management, securities financing, OTC collateral management, counterparty management and prime-broker margin management capabilities.

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