A press release titled, "Tradeweb Completes Acquisition of ICD," tells us, "Tradeweb Markets Inc. (TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced it has completed its acquisition of Institutional Cash Distributors ('ICD'), an investment technology provider for corporate treasury organizations trading short-term investments. The $785 million, all-cash transaction was announced in April 2024. With the acquisition of ICD, Tradeweb adds corporate treasury professionals as a fourth client channel, complementing its existing focus on institutional, wholesale and retail clients, and giving it access to a $2+ billion addressable market. Tradeweb expects the ICD acquisition to be accretive to its adjusted earnings per share over the next 12 months." (Note: Register soon for our European Money Fund Symposium, which is Sept. 19-20, 2024 in London, England. Registration is $1,000 and our discounted hotel rate expires August 14.)
Tradeweb CEO Billy Hult says, "We are excited to complete the acquisition of ICD and launch corporates as a new client channel, offering a key new avenue for growth and building on our strong presence across our other core markets. Corporate treasurers represent an increasingly large and underserved opportunity within fixed income markets, and ICD's differentiated technology offers the perfect gateway between corporates and global fixed income markets. The ICD team shares our commitment to continuous innovation and exceptional client service, and it is a pleasure to officially welcome them to Tradeweb."
The release continues, "As a part of Tradeweb, ICD will provide an increasingly comprehensive solution for corporate treasury organizations worldwide, enhancing its leadership in this space with a range of Tradeweb integration opportunities. In the future, ICD clients will have the ability to optimize yield and duration via Tradeweb's existing suite of products and partnerships, as well as manage liquidity needs and related FX risk. In addition to cross-selling its products to ICD's clients, Tradeweb will leverage its international presence to aim to accelerate ICD's growth and expansion."
It adds, "ICD is one of the largest U.S. institutional money market fund portals, enabling more than 500 corporate treasury organizations from growth and blue-chip companies (including approximately 17% of the S&P 100 as of December 31, 2023) across 65 industries and more than 45 countries to invest in money market funds and other short-term products to manage liquidity."
In other news, the website AdvisorHub published the piece, "Wells Fargo Targeted as Cash Sweep Lawsuits Snowball." It explains, "Plaintiff lawyers are rushing to the courthouse to join a flurry of cases filed over yields on cash sweep programs in recent weeks. In the last two days of July, two investors, one in Hawaii, the other in California, filed two separate proposed class action lawsuits against Wells Fargo Advisors based on allegations that it breached its fiduciary duty by paying customers extremely low interest rates on client cash balances while earning much higher rates itself."
The article continues, "Both lawsuits, which seek class action certification, allege that customers were automatically enrolled in Wells' Bank Deposit Sweep Program, which paid as little as 0.05% interest to customers while Wells potentially earned over 5%. The complaints come after Wells announced earlier this month that it would raise rates on cash sweep accounts, which coincided with similar moves by Morgan Stanley and Merrill Lynch and intensified industry scrutiny of sweep programs. Wells had disclosed in October 2023 an investigation into its cash sweep practices. Cash sweep lawsuits have proliferated as investors have targeted Ameriprise Financial, LPL Financial, Morgan Stanley, Merrill and Charles Schwab."
It adds, "Two of the cases, which had named Merrill and Charles Schwab, have been dismissed, although the Merrill plaintiffs have refiled. Executives at LPL, Ameriprise, Raymond James Financial and Stifel Financial last week stood by the yield on swept cash saying the funds in those programs were relatively small and used like a checking account for short-term needs. LPL offers 'investment options suitable for a longer-term horizon, such as money market funds, CDs, and fixed income funds,' a spokesperson for the brokerage said."
For more on recent Brokerage Sweep News, see these CraneData.com stories: "IN: Ameriprise Sued Over Sweeps" (7/31/24), "Federated Hermes' Donahue, Cunningham Call Hits Sweeps, Flows, Rates" (7/29/24), "Ameriprise, Raymond James Discuss Sweeps Issues on Earnings Call Q&As" (7/26/24), "Barron's Writes on Pressure on Sweeps" (7/25/24), "WSJ, Investment News on Brokerage Deposit, Advisory Sweep Pressures" (7/19/24), "Schwab, BlackRock Q2 Earnings: Cash Migration Slowing, But Continues" (7/17/24).
Finally, the Investment Company Institute published its latest weekly "Money Market Fund Assets" report Thursday, which shows money market mutual fund assets falling to $6.135 trillion in the latest week. Assets have risen in 11 of the last 15 weeks, increasing by $158.0 billion (or 2.6%) since April 24. MMF assets are up by $248 billion, or 5.2%, year-to-date in 2024 (through 7/31/24), with Institutional MMFs up $46 billion, or 1.5% and Retail MMFs up $202 billion, or 12.0%. Over the past 52 weeks, money funds have risen by $619 billion, or 11.2%, with Retail MMFs up by $441 billion (21.5%) and Inst MMFs rising by $178 billion (5.1%).
The weekly release says, "Total money market fund assets decreased by $10.65 billion to $6.13 trillion for the week ended Wednesday, July 31, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $3.65 billion and prime funds decreased by $8.09 billion. Tax-exempt money market funds increased by $1.09 billion." ICI's stats show Institutional MMFs falling $18.4 billion and Retail MMFs rising $7.8 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.955 trillion (80.8% of all money funds), while Total Prime MMFs were $1.051 trillion (17.1%). Tax Exempt MMFs totaled $128.5 billion (2.1%).
ICI explains, "Assets of retail money market funds increased by $7.78 billion to $2.49 trillion. Among retail funds, government money market fund assets increased by $6.00 billion to $1.58 trillion, prime money market fund assets increased by $786 million to $790.19 billion, and tax-exempt fund assets increased by $1.00 billion to $116.65 billion." Retail assets account for over a third of total assets, or 40.6%, and Government Retail assets make up 63.6% of all Retail MMFs.
They add, "Assets of institutional money market funds decreased by $18.43 billion to $3.64 trillion. Among institutional funds, government money market fund assets decreased by $9.65 billion to $3.37 trillion, prime money market fund assets decreased by $8.87 billion to $260.80 billion, and tax-exempt fund assets increased by $91 million to $11.85 billion." Institutional assets accounted for 59.4% of all MMF assets, with Government Institutional assets making up 92.5% of all institutional MMF totals.
According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $16.6 billion in July (through 7/31) to $6.505 trillion. They hit a record $6.559 trillion on 7/11 but have since eased off a bit. Assets rose by $15.7 billion in June and $91.4 billion in May, but they fell $15.8 billion in April and $68.8 billion in March. They rose $72.1 billion in February, $93.9 billion in January, $32.7 billion in December and $226.4 billion in November. MMF totals fell by $31.9 billion in October. They rose $93.9 billion in September and $98.3 billion in August. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $400 billion lower than Crane's asset series.
