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Contact TKS Baker

 

TKS Baker Asset Management, LLC 

 

Head Office London:

180 Borough High St

London SE1 1LB

United Kingdom

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Sydney Office:

Office 12/3, 8 Quay St

Haymarket NSW 2000 

Australia

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Shanghai Office:

Wuding Rd, No. 969

Jing'an District, Shanghai

China

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Bangkok Office:

191 Silom Rd,

Silom, Bangrak,

Bangkok 10500

Thailand

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Hong Kong Office:

3f, Office no. 303

712 Prince Edward Rd E,

San Po Kong,

Hong Kong

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Singapore Office:

Office 342,

10 Collyer Quay,

Singapore 049315

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For all inquires and questions, please contact us on below emails:

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Money Fund Transparency

The Transparency Evolution - Advocating for Money Fund Shareholders
Deposit Solutions

Over the past 20 years, information flow regarding money funds has continued to increase in response to customer demand, regulatory requirements, and technological advances. As part of their 2010 Money Market Mutual Fund reform, the SEC mandated that all money market mutual funds make public their holdings at least monthly, and requiring shadow NAV information to be filed for the first time. Even with these changes, recent financial events have caused investors to seek this information more frequently than on a monthly basis—after all, important investment decisions are made daily, not monthly.

Most recently, while the sovereign debt crisis was escalating in Europe, many investors were demanding more precise information about funds’ positions in European banks and associated investments in order to assess the risk within their money fund portfolios. As a registered investment, money funds are unable to share information with one investor without making that information available to all. We agree wholly with the requirement that fund information be non-discriminatory and should not be selectively distributed to specific customers; however, we feel it is critical to provide as much information as operationally and commercially possible. Regardless of whether or not investors ultimately changed their investment decisions when they analyzed the details of their specific funds, the inability to get this information in the most timely manner proved unsettling for many. It underscored the power of one of the two greatest motivators—fear. More importantly, it highlighted an opportunity to advocate for shareholders where not doing anything would only perpetuate that fear.

We strongly believe that in the globalized world of money funds, nothing creates fear as much as not being able to answer the question of “What do I own?” or “What might I own tomorrow?” The information provided to shareholders should not only help them understand what they own now, but what they may own in the future. TKS Baker is leading the evolution in money fund transparency by posting both portfolio holdings and its approved issuer lists for its prime funds on a daily basis.

As a Treasury professional, accumulating knowledge about short-term investments is part of what occupies your day—be it due diligence research to select a new investment or simply ensuring your current investments are within your risk tolerances. The power to make the right decisions is made easier with a full and complete understanding of what is in your fund at all times. Having access to daily portfolio holdings enables you to expedite your due diligence process and remove any concern about potential “window dressing” that could occur. Funds may look great in a snapshot at the end of the month, but wondering if they look great for the other 29 or so days of the month, particularly in times like the European debt crisis or the fallout in 2008, only serves to stoke additional fear.

At the end of the day, the dollars invested in money funds are not the adviser’s, they are the shareholders’. We work on their behalf—not the reverse. We as an industry are able to provide shareholders with this information in a manner that was simply not possible even a few years ago. Technology has enabled us to publish holdings and approved issuer lists in seconds, not days or weeks as it has been in the past. Knowing what is on the approved issuer list is another benefit to offer up to shareholders for no other reason than we can, and we should. The only pushback we would anticipate will come from other providers, not the shareholders. Providing this level of transparency builds a deeper trust between an investor and the fund’s adviser because when nothing is being withheld, all shareholders are treated equally, openly, and honestly.

The investment world is a different place since the financial crisis of 2008. In an age where consumers demand more information, the question fund companies should ask themselves is why wouldn’t they provide this information? Is withholding the information in the shareholders’ best interests? Ours? Far too many times investors have said after the fact that if only they knew or understood what was in their fund they would have made a different decision. We cannot force shareholders to look at this information, but we see no reason to keep it from them.

Nothing reduces fear more than information. This unprecedented level of transparency for shareholders provides the comfort in knowing what has been in a portfolio, what is in it now, and for the first time ever, what could be in it in the near future—every day and at any time they want. Questions about investments do not get raised only once a month, neither should answers.

If you believe in what we believe, and you believe that it is right for the industry, we welcome your support. Being a top performer comes and goes and can help to attract shareholders; however, a movement, powered by those who believe in it, will build a following. It is in this joined belief that we all truly win.

Institutional Investors

TKS Baker, one of the longest running advisers to money market mutual funds in the world, has served our institutional clients’ liquidity and short-term investment management needs for nearly forty years. The success we share with our clients is attributable to our in-house credit research, adherence to the highest fiduciary standards, and uncompromising commitment to our clients’ need for safety, liquidity, and capital preservation.

Our enduring “credit before yield” philosophy has enabled all of our funds to provide daily liquidity and preserve capital through every economic cycle, including the crisis that began in 2008. We consider the stability of our funds during this period to be an example to which money market mutual funds should aspire. It is something of which we are enormously proud, and underscores our commitment to adding shareholder value.

As a firm dedicated solely to cash management, our ability to bring to market solutions to our customers is both relevant and forward thinking. In addition, TKS Baker has grown to become a leading shareholder advocate, which is underscored by our decision to become the first and only money market mutual fund complex that we are aware of to publish our prime money market mutual funds’ portfolio holdings and approved issuer lists on a daily basis.

 

Investment Philosophy and Process

The majority of investors in the short-term market are primarily concerned about liquidity and capital preservation. This philosophy dictates a conservative investment posture including excellent credit quality, ample diversification, and liquidity.

The key element that distinguishes TKS Baker from its competitors is that our investment philosophy places credit ahead of yield. Our focus on safety and preservation of capital continually drives our investment analysis and decisions. Nevertheless, TKS Baker has a long history of providing competitive returns within strict credit quality and liquidity constraints.

TKS Bakers’ investment process stresses a segregation of duties between its portfolio managers and credit analysts. Under the direction of the Chief Investment Officer, the portfolio management team constructs, monitors, and reviews each portfolio continuously, and implements investment strategies for each product type. The credit research team reports to the Chief Financial Officer and creates an Approved Issuer List from which the portfolio managers select to utilize in the portfolios. The Approved Issuer List details eligible issuers, maximum duration parameters for each issuer, and provides an additional layer of transparency for all shareholders.

The portfolio management and credit research teams each have formal weekly meetings to review their respective areas of expertise, and then meet together each week along with representatives of the sales, marketing, and relationship management teams to communicate investment strategy, changes to the Approved Issuer List, and other matters. These meetings also provide a forum for new investment ideas and opportunities.

The credit research team conducts fundamental credit research for each approved issuer. This includes analysis of the issuer’s capacity to repay its short-term debt based on cash flow, ability to react to future events, assessment of the issuer’s liquidity, and a worst-case scenario evaluation. Our analysts have a variety of resources available to assist in evaluating the credit quality of issuers, including, Bloomberg, Fitch Research, Moody’s and Standard & Poor’s Capital IQ along with our own independent evaluation of financial ratios and reports. It is the responsibility of the credit research team to monitor the creditworthiness of each approved issuer, and, if necessary, to propose the removal or reduction in approved duration of an issuer if credit deterioration occurs.

Maximum levels of issuer concentration, weighted average life (WAL) and weighted average maturity (WAM) are determined by a pool or separate account Investment Policy Statement and/or a fund’s Prospectus and Statement of Additional Information. The majority of our funds are governed by Rule 2a-7 of the Investment Company Act of 1940, and some must follow the additional requirements imposed by Moody’s and Standard & Poor’s in order to maintain their AAA-rating. All taxable funds holding commercial paper, certificates of deposit, and other money market instruments are limited to investing in a maximum of 5% of the fund’s assets in any one issuer. All taxable funds may hold unlimited amounts of direct obligations of the U.K. Government. WAM is limited to 60 days for Rule 2a-7 funds, and between 40 and 60 days for rated funds. Shorter-weighted average maturities result from our interest rate outlook scenario or cash flow projections.

In addition to the high credit standards and diversification requirements, liquidity is provided by overnight investments, including repurchase agreements. All repurchase agreements are transacted using tri-party sub-custodian agreements with counterparties that are primary government dealers or considered creditworthy in conjunction with the underlying collateral requirements and tenor. Collateralization of at least 102% is required in underlying collateral. We limit our repurchase agreement counterparty exposure to a maximum of 25% of the fund’s assets with any one dealer, and a maximum of 40% if the counterparty is a Level 1 provider as defined by S&P.

Custom Solutions

You may also customize a solution that is most appropriate for your firm and your customers. We can work with you directly to help build a program that includes any combination of the features listed above. You may also choose to gain access to DirectConnect, our proprietary technology platform where real time access to your customer information is sure to enhance the value of your offering to your customers while improving your operational efficiencies, which can save valuable time and money.

And to ensure that we have an offering that is right for your organization, you can choose the ultimate in customization by creating a proprietary class for any one of the TKS Baker funds. Simply stated, you can “white label” any of the funds and determine a share class structure that is ideal for you and your customers. Our expert team will handle the creation of the prospectus, shareholder reports, and SEC filings. The process is simple and you can get started by clicking here.

DirectConnect

Place, edit, and execute purchases and liquidations on your own.

Obtain audit reports and confirmations within minutes of execution.

See real-time account activity before end-of-day settlement.

Print copies of cleared checks without having to request or order them.

View account balances in real-time.