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Cash Management Proposal

Cash Management Proposal . Issue: UVU currently invests all “working capital cash” in Utah State Treasurer’s Pool. Cash is liquid and safe but only earns at the lowest “short term” rates.

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Cash Management Proposal

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  1. Cash Management Proposal • Issue: UVU currently invests all “working capital cash” in Utah State Treasurer’s Pool. Cash is liquid and safe but only earns at the lowest “short term” rates. • Proposal: That UVU take some of its not used and available “working capital cash” and invest it in “Intermediate-Term Investments,” enhancing earnings on cash (approximately four times the rate), while following all Utah Money Management Act requirements, in prudent investments in CDs, Treasuries, Agency Bonds and high-rated Corporate Bonds.

  2. Cash Management Proposal • Enhance earning on cash • Diversify portfolio • Ladder investments for liquidity • Continued compliance with the Money Management Act

  3. History of UVU's Cash Balance

  4. Cash Balances

  5. Cash Management Strategy • Safety of principal • UVU currently deposits all its “cash” with the Utah State Treasurer’s Pool. (Safe, but all cash with single entity) • Need for liquidity • This “pool” is very liquid • Yield on investment • PTIF has a low yield UVU follows the State Money Management Act criteria for investing

  6. Proposal to Increase Yield • All investments strictly follow the Utah Money Management Act • Purchase intermediate-term high grade investments • Investments will be laddered for liquidity • All investments are held in the name of the University

  7. Money Management Act • Investing may only be done through approved Certified Dealers and Advisors DealersAdvisors • Barclays Capital Inc. Cutwater Asset Management • Cortview Capital Securities LLC Morgan Stanley Smith Barney • George K. Baum & Co. Yellowstone Partners LLC • Jeffries & CoZions Wealth Advisors DBA for • JP Morgan Securities, LLC Contango Capital Advisors Inc • LPL Financial LLC • Merrill Lynch, Pierce, Fenner& Smith • Morgan Stanley Smith Barney • Raymond James & Associates, Inc. • RCB Capital Markets Corp. • Sterne, Agee & Leach, Inc. • UBS Financial Services Inc. • Wells Fargo Advisors LLC • Wells Fargo Securities, LLC Certified Dealers: Recognized by the Federal Reserve Bank of New York Certified Advisors: Registered under Section 203 of the Investment Advisers Act of 1940

  8. Money Management Act • Requires liquidity • Laddering investments allows for liquidity • Outlines approved investment instruments that are rated "A" or higher or the equivalent of "A" or higher, by two nationally recognized statistical rating organizations one of which must be Moody's Investors Service, or Standard and Poor's; • CDs • Repurchase Agreements • Commercial Paper (Commercial Bonds) • US Treasury Obligations • Other obligations of Federal and State Governments.

  9. Short-Term Investments (Cash)

  10. Intermediate-term • Investments • CDs • Treasuries • Agency Bonds • Corporate Bonds Reward vs Liquidity Risk • Short-term • Investments • Bank Deposits • Money Markets • Overnight Funds Yield Possible additional yield By actively layering liquidity over time Time

  11. What are other Universities doing for Cash Management?

  12. What are other Universities doing for Cash Management?

  13. What are other Universities doing for Endowments?

  14. Options Available *Administration recommends using Wells Fargoand one other Certified Dealer, following the State Money Management Act “We haven’t looked at entertaining the use of an (in-house) advisor because it is difficult under the limitations of the Act to get a return large enough to cover the cost of the hiring of an (in-house) advisor.” - Mel F. Smith, Manager – Banking & Operational Investment, University of Utah

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