The 2013 guide to Liquidity Management: KrisEnergy - passive investment management

By:
Laurence Neville
Published on:

The 2013 guide to Liquidity Management

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KrisEnergy is an independent upstream oil and gas company established in September 2009. It has grown rapidly and has consequently needed flexible banking arrangements to meet its evolving needs. Most recently, the company required a passive investment strategy for working capital across the region, which RBS was able to deliver with its Cross-Border Cash Optimisation programme. "It maintains local autonomy while maximizing liquidity, enhancing yield and operational efficiency," explains Steve Clifford, chief strategy officer and vice president, treasury, at KrisEnergy. "It also gives us fully automated management information."

The programme for KrisEnergy covers several countries, currencies and entities across Asia Pacific. However, as a virtual overlay structure, the arrangement is simple to deploy. It involves no physical movement or commingling of funds, no lock-in periods or amounts, and no conversion of account positions. Recently, capital injections supporting the next phase of KrisEnergy’s development prompted a heightened focus on its investment approach. KrisEnergy required a liquidity structure weighted towards shorter-term investments – but at the same time the company wanted to retain the flexibility to redeploy funds when needed.

RBS proposed its Yield Call Demand Account investment management solution. The product offers a transparent benchmark-linked interest rate and in addition, for balances that remain stable over a pre-agreed period, a bonus yield based on a term rate. Moreover, it does not have the restrictive characteristics of a traditional time/notice deposit: liquidity can be accessed instantly if necessary.