Salesforce developed two money market fund (MMF) alternatives comprising an in-house (“Government only”) strategy on one hand and mandating an existing external manager to run a cash-plus fund (“prime fund”) on the other. By both reducing fees and creating ladders around known outflows, the team were able to significantly out-perform traditional MMFs.

Fee reduction was a critical element of the solution. Most MMFs charge between 15 and 20 basis points (bps). By managing a portion of these funds in-house, Salesforce cut costs resulting in higher interest income compared to similar risk with a government MMF.

“We leveraged an existing manager for our ‘prime fund’ alternative, which decreased the additional fees for this strategy. Each incremental dollar was in the manager’s lowest tier AUM bracket, which on average is lower than MMF fees by a range of three to ten bps,” says Cameron Bowen, Director, Treasury.

In another win, the team managed to outperform MMFs due to regulatory arbitrage. Neither the “government” nor the “prime fund” need to comply with MMF regulations around daily/weekly liquid assets and maximum maturity of individual securities.

Salesforce used its own technology to implement the solutions via Tableau and Slack. The team developed a Tableau dashboard that provides next day reporting on all cash and investment accounts to optimise balances. The reporting requests two data sources via TMS and Clearwater – TMS provides high level balance information on all cash, deposits, MMFs and separate accounts and Clearwater provides all the individual holdings of separately managed accounts.

To optimise the ladders, the team had to refine their approach to monitoring cash by creating dashboards.

Using a Slack Workflow, the team populate a Google sheet which uploads trades to its custodian once the trade is placed via Bloomberg chat/phone. This eliminates free-form data entry and minimises errors. In a seamless and effective transition, the in-house mandate was developed and launched within a month.