Liquidity solutions and platform in tune with Klook’s conservative investment approach

The challenge

Klook’s cash investment approach is conservative. Its treasury team focuses on capital preservation and access to liquidity, before seeking a reasonable return. However, challenges arose along with Klook’s growth. As the start-up that underwent multiple funding rounds (totalling more than US$500m, the most recent 2019 round raised US$255m, the largest fundraising in global tours and services until that time), the company needed to find an appropriate, comprehensive ultra-short- to short-term global cash investment solution.

With its objectives and scale, Klook needed holistic cash investing capabilities, multi-currency, ease of trading online, the ability to remain conservative yet optimise returns on excess cash and reasonable returns in an ultra-low yield environment. Klook’s challenges included:

• Rapid expansion - growth plans into new markets in Europe, the US and Australia required extensive cash planning advice, efficiency and know-how.
  
  
• The need for flexible cash flows - operating across many markets, Klook needed flexible investment solutions beyond traditional bank deposits.
  
  
• Historically low global yields - rate cuts by major central banks, and a period of extreme market volatility during the COVID-19 pandemic, prompted concerns among many investors.

The solution

Klook began its search for a long-term investment partner that could provide diversified solutions across currencies with flexible investment horizons. Their choice was to partner with J.P. Morgan Global Liquidity, for its well-established credit approach, flexibility in scale and across currencies, and the comprehensiveness of its cash solutions. 

Best practice and innovation

• The solution provides multi-currency capability to meet Klook’s present needs for operating in USD, HKD, SGD and RMB, and is ready to meet the company’s future currency needs when it enters new markets.
  
  
• Flexibility – The solutions require a relatively low amount to invest and has no restriction on time horizon. Klook is able to benefit from same-/next- day liquidity with seamless redemption.
  
  
• Easy of operation – J.P. Morgan Global Liquidity’s online trading platform, MORGAN MONEY, is an easy-to-use single platform, convenient for managing cash invested across currencies. It can be linked to major treasury management system (TMS) via an application programming interface (and is equally useful for start-ups like Klook which don’t have their own systems. Klook’s treasurers have access to current balances in real-time and can choose investments with just a single click on the platform.

Key benefits

• A comprehensive cash management solution that is multi-currency, highly liquid, offers investment flexibility 
• A convenient real-time trading platform
• Regular and easy-to-read Liquidity Insights 
• A competitive yield advantage
• High quality client services 

“With the COVID-19 pandemic’s impact on the travel industry, and the prospect of an ultra-low yield environment for some time, we are setting our growth strategy towards preserving cash, with the goal of maintaining the safety of principal alongside enhancing yields in our multi-currency cash portfolio, while doing it all efficiently,” says Ching Ling, Treasury Director.

The opinions and views expressed here are those held by the author at the date of publication which are subject to change and are not to be taken as or constructed as investment advice.

The article was first published by Treasury Today Asia in January 2021.

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