We founded the Liquidity Reserve Account to deal with the concerns of treasurers, both public and private, foreign investors and high net worth investors who today are faced with risk levels never before associated with investments of balance sheet cash. Recent developments in the world credit markets have heightened concern about Safety (credit risk), Liquidity, (timely access to your money), and the very important need for Transparency, (you know what you own). Not too long ago Safety, Liquidity and Transparency were not on very many radar screens of concerns. We spent  two  years developing the Liquidity Reserve Account. Little did we know the magnitude of the correction and how important our Liquidity Reserve Account would change the approach to investing cash.

Safety:

All of your assets in the Liquidity Reserve Account will be invested in direct obligations of the United States Government, its agencies or instrumentalities. We take no credit risk with your money. The US Government and Agency markets are among the largest and most liquid debt markets in the world. During any credit crisis investors who need to be assured that they would have access to their cash investments, found the liquidity they were looking for in the US Government market. That same liquidity can be found in your Liquidity Reserve Account.

Transparency:

The role of Transparency or rather the lack there of, is one of the things that has forever changed financial transactions. Investors lost money because they did not know what they owned, but the investment structures they purchased, in many cases, did not allow them to know what they owned. We use an investor owned Statutory Trust or managed account to segregate your assets. You own the trust and only your assets are in your trust or your managed account. At any time you want, you can look into your account to verify what you own.

Knowing what you own seems like it would be basic and fundamental in making investments. When one looks at the steep declines in the world equity and commodity markets the most common question being asked, “How did this happen?” One thing that is becoming more apparent is that “Style Drift” was one of the culprits. When managers start reaching for more performance, they take more risk to try to achieve that extra performance. The result of this reaching for return beyond what the manager is charged under a style approach of investing is serious “Style Drift”.

Our approach in investing your money is based on the concept of “Target Return” investing. “Target Return” investing is managing money that starts with the question, “What return do we need to achieve for our clients?”. Once we have determined the yield or portfolio return target, through asset allocation, we determine what is the least amount of volatility risk that we need to take to achieve the “Target Return”. We have set as our “Target Return” for the Liquidity Reserve Account to pay net of fees and expenses, the yield of 90-Day LIBOR plus 15%, with the least amount volatility. We do not have incentives to produce higher returns other than the target; therefore, we can not have a problem of “Style Drift”.

We believe that we have developed an investment that responds to the challenges of today's financial turmoil. We believe that The Liquidity Reserve Account will fulfill the needs of investors for many years to come. We live in historic times and the development of our Liquidity Reserve Account structure represents the future of how people will invest money.