Best Cash Pooling Solution Winner: Storskogen Group AB

Published: Jan 2024
Photo of Shuo-yen Choo, Xiaoqing Dong, Storskogen Group AB and Andy Tan, J.P. Morgan.

Photo of Shuo-yen Choo, Xiaoqing Dong, Storskogen Group AB and Andy Tan, J.P. Morgan.

Frida Holmer

Senior Cash Manager

Founded in 2012 in Sweden, Storskogen engages in the acquisition and management of small and medium enterprises (SMEs) with businesses across trade, industry and services. As of March 2023, Storskogen manages 134 business units across 14 verticals with over 12,900 employees.

in partnership with

J.P. Morgan logo

Storskogen’s APAC-centric MEMCNP helps integrate acquired SMEs

The challenge

In 2022, Storskogen launched an office in Singapore as a step in the Group’s vision to become the leading international owner of small and medium-sized enterprises (SMEs). Since then, Storskogen has strengthened its foothold in the area through selective and strategic acquisitions. Given its Group Treasury’s keen focus on having full visibility and control over its global cash, Storskogen wanted to set up a regional cash pooling structure to integrate funds across the acquired companies into the Group.

However, due to the SMEs unfamiliarity with global liquidity concepts and shared control of cash Storskogen faced challenges integrating the SMEs into the structure. At the same time, its Group Treasury required all new companies to begin participating in the cash pool within a restricted time frame, which further complicated things.

The solution

Storskogen worked with J.P. Morgan to create a unique regional liquidity structure that incorporates the requirements of its Group Treasury while also meeting the needs of the acquired SMEs, to seamlessly integrate them into the pool.

Liquidity structure

Integrating acquired businesses into an existing structure can be a highly complex affair. For that reason, Storskogen and J.P. Morgan proactively sought to understand the cash management needs and current processes of the SMEs as a critical first step. To bring business owners up to speed, Storskogen and the bank shared product illustrations and best practices around cash pooling and drew up business cases and cost benefit analyses to facilitate the SMEs’ bank transition and cost concerns.

The joint effort led to the deployment of an APAC-centric multi-entity multicurrency notional pool (MEMCNP) for Storskogen in Singapore, which went live in March 2023. To address the requirements of Storskogen’s Group Treasury and the acquired entities, the pool is supplemented with domestic and cross-border physical and automated sweeps, as well as other tailored sweep parameters that delivers high-level flexibilities to effectively manage cash at both the group and entity levels.

“As a next step, we are looking to connect our APAC MEMNCP with our global cash pool in Amsterdam to drive greater cash utilisation and efficiencies,” explains Frida Holmer, Senior Cash Manager.

Best practice and innovation

With different business styles, banking structures and cash and liquidity processes, acquisitions are often tricky to integrate into the financial structure of a parent organisation. But Storskogen did this seamlessly by putting in place a sophisticated regional liquidity pooling structure that is supplemented by complex and carefully designed sweep parameters to effectively address the cash management and business needs of both Storskogen, as the new owner, and the CEOs of the respective SMEs.

The complex structure deployed for Storskogen is the outcome of in-depth discussions that Storskogen and J.P. Morgan held with the acquired companies to understand their needs and concerns, while sharing best practices and business cases to assure them of the benefits of participating in the pooling structure. Through active financial management and governance, Storskogen will be able to ensure the companies continue to have functioning business plans and budgets to prioritise long-term results.

This is an exemplary case which demonstrates how close collaboration with its banking provider can drive exceptional outcomes for Storskogen. The scalable and robust structure combined with the proven engagement model will enable Storskogen to focus on supporting its businesses in strategic and operational matters, without stressing over banking matters.

Key benefits

  • Cost savings.

  • Process efficiencies.

  • Increased automation.

  • Improved visibility.

  • Increased system connectivity.

  • Future-proof solution.

  • Exceptional implementation (budget/time).

Andy Tan

Vice President, APAC Payments Sales, J.P. Morgan

Establishing this highly customised APAC-centric cash pool enabled Storskogen group to achieve cash visibility and automate access to group liquidity. Throughout the journey, we addressed multiple stakeholders’ concerns by adopting a consultative approach, with careful design and illustration of pooling concepts and techniques. This multi-entity multi-currency solution is future-proofed to meet Storskogen’s ambitious expansion plans in Asia Pacific. Our success is a testament of the strong collaboration between Storskogen Group and J.P. Morgan. We are grateful for the trust that Storskogen Group places with J.P. Morgan and we look forward to this continued global partnership.

in partnership with

J.P. Morgan logo

The Adam Smith Awards Asia is the industry benchmark for best practice and innovation in corporate treasury. The 2023 awards attracted 450 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia

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