Legal & General, LV= Asset Management and Premier say they will retain their cash funds following Standard Life’s departure from the money market sector.
Last week, Standard Life pulled out of the cash funds market due to regulatory pressure. The move will see the closure of three funds including the £2.5bn sterling global liquidity, £1bn Euro global liquidity and £200m US dollar global liquidity funds.
The IMA is thought to be gearing up to introduce a short-term definition for the funds from July, capping their weighted average maturity at 60 days as opposed to the alternative long-term definition, which has no maturity cap.
L&G head of cash management says Jennifer Gillespie says: “There has been a slight decline in the sense that people are coming out of cash as an asset class. We are 100 per cent committed to cash funds and, in particular, constant net asset value funds.”
LV= Asset Management head of fixed income Mike Wright says: “We remain committed to the money market. Our interest rate risk is less than two months and securities are not held for longer than a year, as our fund’s security is more important than a few extra basis points. However, the cap will restrict us with the two-month period.”
Premier sales and marketing director Simon Weldon says the firm is “100 per cent committed” to cash funds but adds that the cap will place an “unnecessary restriction on fund managers”.