The challenge

Mace is multi-disciplinary and multi-jurisdictional meaning there can often be multiple entities operating in each jurisdiction. As Mace’s work is frequently project-based, the company may also exit a jurisdiction on completion of the project, which requires flexibility in the treasury structure. Due to the international nature of the business, cash visibility and mobilisation back to the centre was challenging and Mace was looking to build a global cash pool which supported maximum cash centralisation across multiple currencies whilst minimising intercompany lending/borrowing relationships to the greatest extent possible. As Mace currently does not have a TMS, reduced administration was critical.

The solution

Mace worked with Deloitte and partnered with its global cash management bank J.P. Morgan in 2021 with implementation taking place in 2022 and the initial phase going live in September 2022.

J.P. Morgan created a global liquidity structure with a large multi-entity notional pool, comprising 24 legal entities, 56 bank accounts and covering 19 currencies. The solution is based on the bank’s London branch with physical cash concentration from in-country locations where permitted. Account booking locations involved include the UK, Ireland, the Netherlands, Switzerland, France, Germany, the US, Canada, Singapore, Australia and Korea as part of Phase 1. Due to its diverse geographic presence, Mace opted for a large multi-entity pool to avoid transfer pricing challenges created through intercompany relationships.

One of the unique attributes of this pool is that it allows Mace full flexibility and fungibility of all the balances across those 19 currencies. So, whether Mace holds a particular currency or not, the company can make payments in that currency, on the basis that it holds the corresponding balance in another currency. It allows Mace to be extremely flexible when it comes to its international currency requirements.

It also means the company’s liquidity is centralised, and has less pockets of cash sitting idle around the world, earning little or no interest. This cash is now centralised and used to repay debt, invested or it can be used for a project expansion or capital expenditure.

Ultimately, it is cheaper for the company to use its own cash to support growth, rather than borrowing it.

Mace leverages J.P. Morgan’s Access Liquidity Solutions module to get real-time reporting and end-of-day forecasting of cash positions across the multiple currencies.

Best practice and innovation

The new liquidity management structure has allowed Mace to progress the closing of one notional pool and substantially shrink another in favour of a single centralised pool. The complexity of Mace’s legal entity structure and global presence required close co-ordination with the Company Secretariat to include overseas branch registrations of UK legal entities. In addition, the sheer size and breadth of the solution, which has involved implementing a single pooling structure including substantially all the international business, is a standout feature. Entity jurisdictions participating in the pool include the UK as well as Australia, Canada, Germany, Greece, Ireland, Jersey, the Netherlands, Singapore, Sweden, Switzerland and the United States, with more to follow. The combination of the branch registration and country jurisdictions included in the pool makes the solution quite differentiated.

Because Mace is highly project-based, it often enters new jurisdictions and opens new entities and accounts. The new notional pooling structures provide the flexibility to add new entities into the pool and supports Mace as it operates around the world.

With J.P. Morgan embedded into Mace’s Oracle cash management module, there is greater visibility, automation and efficiency across the Mace Group and it is considered a very advanced structure.

Key benefits

• Cost savings.

• Number of banking partners/bank accounts reduced.

• Process efficiencies.

• Increased automation.

• Risk mitigated.

• Improved visibility.

• Manual intervention reduced.

• Increased system connectivity.

• Future-proof solution.

• Exceptional implementation by the treasury and central finance team (budget/time).

“Previously, we operated with one UK company focused notional pool and another manual overlay pool, which was inefficient from an operational perspective, considering the geographic complexity of the Group’s operations. Creating a main, international, scalable, and automated cash pool for such a large international group, across so many entities and currencies makes the solution particularly unique.”

Ed Baker, Head of Treasury