Patrick Liddy, the former director of sales and marketing at National Asset Servicing, has announced the formation of his new business – Implementation Efficiency Group – with seed funding from one of its shareholders.
IE Group has commenced the cash management part of its service for super funds and managers, Liddy (pictured) said yesterday, and would soon complete the technology build to be able to provide a similar service for FX management.
IE Group is being backed by 25 per cent shareholder, Sonray, a Melbourne-based broker, which has also provided the first $10 million in operational cash for IE Group to place. IE Group has compiled a panel of banks with which it actively monitors and changes its cash holdings to maximise daily rates.
Liddy, who is joined on the board by a former colleague at NAB, Tony O’Grady, said that at any one time a super fund might have 5-6 per cent of assets as operational or incidental cash (apart from strategic allocations or investment options in cash) and the rates provided by custodians were often below the official rate.
Similarly in FX, he said, the spreads obtained under normal “standing orders” from fund managers were rarely the best possible rates.
Liddy said there had been enormous interest expressed in the service, by both funds and managers, since he started talking to people about it early this month.
Several potential clients had asked for a “diagnostics report” on their recent cash and FX arrangements, Liddy said, which would demonstrate whether and where extra returns could have been garnered.
He believes that with more active management the average super fund could earn an additional 50-100bps a year from its cash positions alone, and at least as much again from better handling of its FX activities.
“The other advantage of the service is that it reduces the client’s risk, too, by widening the range of counterparties used,” he said. “And there is no need to change the custodian. All other service providers are retained.”