Cash & Liquidity Management

SMA demystification: liquidity, flexibility and yield

Published: Jan 2022

In a recent webinar, a panel of experts discussed how Separately Managed Accounts have evolved to offer corporate treasury teams bespoke cash management strategies that combine yield, liquidity, tilted ESG exposure and hands-on asset management expertise.

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Portrait of Will Nossier, Director of Group Treasury,

Will Nossier

Director of Group Treasury

Portrait of Lauren Oakes, Global Co-Head of Liquidity Solutions Client Business, Goldman Sachs Asset Management

Lauren Oakes

Global Co-Head of Liquidity Solutions Client Business
Goldman Sachs Asset Management

Portrait of Damien Cahill, Sales Director, EMEA Corporate division, Clearwater Analytics

Damien Cahill

Sales Director, EMEA Corporate division
Clearwater Analytics<

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Separately Managed Accounts (SMAs) have a reputation for complexity, but an increasing number of treasury teams are opting to invest in these bespoke vehicles. Speaking in a recent webinar, Lauren Oakes, Global Co-Head of Liquidity Solutions Client Business at Goldman Sachs Asset Management, Damien Cahill, Sales Director, EMEA Corporate Division at Clearwater Analytics and Will Nossier, Director of Group Treasury at, leading global travel platform, explained how SMAs have evolved to offer treasury teams customisable liquidity solutions.


One of the key reasons behind growing SMA take-up is market evolution. Corporate allocations to traditional MMFs have ballooned during the last decade, creating a launch pad from which treasury can confidently allocate to next-step SMAs. SMA use is also growing as more corporates, led by US treasury teams, hunt for yield on their cash in a low rate environment and consider bespoke exposure, especially on relating to ESG.

Today SMAs comprise of key pillars in a simplified product offering, explains Oakes. Custodians offer standardised paperwork for set up simplifying the onboarding process; asset managers like Goldman Sachs focus on providing the investment expertise and market access while partnerships with service providers like Clearwater Analytics have changed backend reporting, introducing the ability to monitor SMAs daily with on-demand performance analysis.

“The management of relationships, multiple agreements and the operational undertaking has historically put investors off the product,” says Cahill, explaining that Clearwater as a SaaS solution can remove the administrative and IT burden for treasury teams by working with its library of connections and custodians, asset managers, treasury management systems and enterprise resource planning applications. Typical onboarding time is four to six weeks. The Clearwater team take care of the data migration, including the coding of the chart of accounts, and can support multiple currencies and bases, as well as regulatory reporting such as IFRS9 and Solvency II.

SMAs differ from MMFs in some key areas, says Oakes. Assets in the SMA are owned outright by the investor; the investor chooses a manager to execute on specific objectives, benchmarks and timeframes and can opt for expertise around, for example, ESG alignment or currencies.


Demand for SMAs has also grown with treasurers’ knowledge of the product. Treasury teams are better informed of the flexibility SMAs offer around the size of vehicle, and no longer view them simply as a high-yield product for longer-term cash allocations. Treasury teams are more aware that different maturity ladders of SMAs can ensure a constant flow of cash for withdrawal or reinvestment in an SMA: money can be available in just a few days and compliment any programme run in-house. An investor’s objectives are written into the Investment Management Agreement (IMA) by the investor and manager, customised to a specific mandate.


Putting in place an IMA had its challenges when began using SMAs, explains Nossier. However, the process was smoothed by the firm’s asset manager being on-hand to help set the risk profile, eligible assets and any specialist portfolio requirements for the company. Asset managers shape a bespoke balance sheet strategy around clients’ cash usage which informs allocations to issuers, sectors and decisions around credit quality, duration, and yield within the SMA, he says.

Treasury teams also need to think about restriction lists or parts of the policy that are a little more actively managed depending on a corporate’s evolving strategy. “It all ties back to the flexibility you can build into your SMA,” says Nossier.

Having the proper governance was also essential. It is why using tools offered by providers like Clearwater is helpful. Once a rules engine has been configured, alerts can be triggered upon detection of portfolio breaches which is useful for audit purposes.

Nossier concluded that the SMA structure allowed his treasury team to call on its asset manager during market turmoil in March 2020. “Back then it would have been challenging competing with institutional trading desks when attempting to sell positions,” he says. Fast forward to today’s potential rising rate environment and that relationship is just as important as the company seeks to align its SMA exposure with its conservative risk profile, drawing on hypothetical portfolio models and macro analysis proved by its asset manager.

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