Liquidity Solutions

Using Short Cycle Cash for an M&A Transaction

The Challenge

The Client

A multinational company acquired another business and sought to maintain a large cash balance while waiting for the closing. The client preferred to invest in money market funds (MMF) they defined as partnering with diverse-owned broker-dealer firms (D&I-partnered MMF).

The Objective

Manage significant cash balance for a short period of time through money market funds.

Our Assignment
  • Provide the client with multiple, government MMF investment vehicles that are able hold large balances for the short-term and are accessible on one platform.
  • Deploy specifically requested D&I-partnered MMF from multiple providers.
  • Utilize an investment vehicle that seeks to provide principal protection and same day liquidity.
Our Solution

Access D&I partnered MMF Through the Mosaic Platform

By leveraging our Mosaic investment portal, we were able to streamline access to external fund families, allowing the client to manage fund concentration limits more efficiently.

Our solution provided access to both Goldman Sachs Asset Management’s and external D&I-partnered MMF solutions via the Mosaic trading platform.

The Outcome

Dedicated Coverage, Workflow, and Execution

Through reviews of the planned workflow for the cash, settlement timings, and expectations of the regional stakeholders, we developed dedicated contacts in sales and service teams who understood the entire workflow requirements and were able to execute the plan prior to transaction close.

Previously, timing the movement of cash was uncertain and required frequent communication between the client and sales.

Mosaic is made available in the United States by Goldman Sachs & Co. LLC. Depending upon the jurisdiction in which you are located, transactions in non-Goldman Sachs money market funds are affected by Goldman Sachs & Co. LLC, a member of FINRA, SIPC and NYSE, or Goldman Sachs International. For additional information contact your Goldman Sachs representative. Goldman Sachs & Co. LLC, Goldman Sachs Liquidity Solutions, Goldman Sachs Asset Management, L.P., and the Goldman Sachs funds available through Goldman Sachs Liquidity Solutions and other affiliated entities, are under the common control of the Goldman Sachs Group, Inc.

The cited case studies represent examples of how we have partnered with various institutional clients on a broad range of services and offerings. The experiences outlined in the case studies may not be representative of the experience of other clients. The case studies have not been selected based on portfolio performance and are not indicative of future performance or success. This is not a testimonial for Goldman Sachs Asset Management’s advisory services.

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GlossaryDiverse-Owned Broker Dealer: Minority, Women and/or Veteran owned broker dealers.See Glossary for definition of terms used in reference to Products
Risk considerations and disclosures

Investments in fixed income securities are subject to the risks associated with debt securities generally, including credit, liquidity, interest rate, prepayment and extension risk. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in the decline in the bond’s price.  The value of securities with variable and floating interest rates are generally less sensitive to interest rate changes than securities with fixed interest rates. Variable and floating rate securities may decline in value if interest rates do not move as expected. Conversely, variable and floating rate securities will not generally rise in value if market interest rates decline. Credit risk is the risk that an issuer will default on payments of interest and principal. Credit risk is higher when investing in high yield bonds, also known as junk bonds. Prepayment risk is the risk that the issuer of a security may pay off principal more quickly than originally anticipated. Extension risk is the risk that the issuer of a security may pay off principal more slowly than originally anticipated. All fixed income investments may be worth less than their original cost upon redemption or maturity.

You could lose money by investing in a money market fund.  An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.  Money market funds are not subject to credit risk, but will have interest rate risk.  Institutional money market funds may have floating net asset values, and will fluctuate depending on market conditions. The Fund’s sponsor has no legal obligation to provide financial support to a money market fund, and you should not expect that the sponsor will provide financial support to the money market fund at any time.

For illustrative purposes only. Performance results vary depending on the client’s investment goals, objectives, and constraints. There can be no assurance that the same or similar results to those presented above can or will be achieved.

The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

Capital is at risk.

THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.

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This material is provided for educational and informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. This material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon the client’s investment objectives.

Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur. 

This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by Goldman Sachs Asset Management and is not financial research nor a product of Goldman Sachs Global Investment Research (GIR). It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and Goldman Sachs Asset Management has no obligation to provide any updates or changes.

Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. It should not be assumed that investment decisions made in the future will be profitable or will equal the performance of the securities discussed in this document.

Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by Goldman Sachs Asset Management to buy, sell, or hold any security. Views and opinions are current as of the date of this publication and may be subject to change, they should not be construed as investment advice.

There is no guarantee that objectives will be met.