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Corporate Investment: A Real Flight to Safety

Treasurers and C-level executives have gone from greedy for yield to cautious about liquidity, and in the last six months have shifted their cash and short-term investments to bank deposits, money market mutual funds and treasury bills.

By Dave Lindorff | Updated on August 01, 2008

David Goddard, treasurer of Verisign Corp., the $1.5-billion Internet infrastructure firm, spends part of each week in his Mountain View, Calif., office hunched over printouts of his company’s short-term money market fund investments with a ruler. He goes line by line through the holdings of each fund to see exactly what they are. “This job has changed in a way I never expected to see in my career,” says the 44-year-old treasurer, who assumed his post in December 2006. “But because of the things happening now that haven’t happened since the Great Depression, this is the future. Transparency is critical to ensuring liquidity, and you have to know what you’re investing in.”

Goddard, also president of the Silicon Valley Treasury Management Association, says that he is not alone in his new heightened concern about the quality and liquidity of his company’s short-term cash investments. “I’m constantly in contact with other treasurers,” he says, “and we’re definitely seeing a flight to liquidity and to quality. Certainly getting a good return is on everyone’s list of priorities, but it’s not the highest priority. The highest priority is preserving capital and liquidity.”

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