TIMPG2 Discusses Repatriated Cash, Washington’s Impact on the Market and Managing Data in One Location

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TIMPG2 Discusses Repatriated Cash, Washington’s Impact on the Market and Managing Data in One Location

The TIMPG2 spring meeting in San Francisco, hosted and sponsored by DWS, gave members the chance to discuss where they stand, post-tax reform, on repatriating (and spending) overseas cash, the global economic outlook, rising interest rates and bringing technology to the investment management process. Here are some of the standout themes that emerged:
 
Tax reform takes center stage. Tax reform and its various implications are top of mind for cash managers, with pre-meeting survey results ranking tax planning and analysis the top project and priority. Many members are still in a wait and see mode, letting assets shorten over time and preparing for word from management about when and where repatriated cash is going. Members who plan to bring money back onshore were either strategically short in duration or plan to let assets mature over time and leave the liquidity offshore to bring back onshore as liquid cash. The latter seemed to be the preferred method, with many members’ tax departments judging the sting of the unrealized loss from an asset transfer too large a sacrifice, not to mention keeping track of multiple sets of accounting records. 
 
Members stressed the need for better cash flow forecasting as they will be forced to operate with smaller cash liquidity buffers once money comes back on shore. Several members mentioned the timing of the cash movement as the biggest variable.  One member, whose company previously wanted to generate maximum cash offshore for tax efficiency, is now asking whether to continue with this structure “or will repatriation be a continuous event?” But when all was said and done, many members left the meeting feeling comforted that not everyone has mapped out precisely how much cash is going to be repatriated, when it’s going to be moved back to the US, what that cash will be used for exactly, or has figured out the accounting details of transferring assets from one country to another.
 
“If you are questioning the markets you are not alone.”  Deutsche Bank assured members that with so many variables in the current environment, markets have become a bit unpredictable. The firm shared the top ten issues that will impact markets — many negatively, potentially — for the remainder of the year. Geopolitical events loom large; in Asia there’s uncertainty over the outcome of talks between North and South Korea, with the US and China in the background, as Japan and others boost military strength. On a more positive note, one DWS presenter commented that a strong and focused Federal Reserve chair (and vice chairs) will keep the economy steady. He believes that this is the strongest Fed in decades, saying, “This is a positive. We have some strong folks there.”
 
Starting to test the waters of technology. Recognizing that no one system does it all, members shared their experiences with a variety of systems such as Power BI and Tableau to compile data into one place. One member noted, “No one system will do everything, so how do I integrate? We have built an in-house data warehouse solution. The next issue is do you have the skills in treasury?” Members also shared that once you find someone with the right skill set, you need to guard them as everyone is out there looking. Read more about technological transformation here. 
 
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