Every healthcare organization has a portfolio of key financial resources—such as cash, credit, leverage, and invested assets—which its leaders seek to deploy in a manner that balances growth with risk management for the financial health of the organization. This balance can be achieved through use of Kaufman Hall’s Treasury and Capital Markets approach.
In this video, Eric Jordahl, Managing Director for the Treasury and Capital Markets team at Kaufman Hall, provides an introduction to how Kaufman Hall helps hospitals and healthcare systems across these five disciplines of the Treasury platform:
- Capital Management
- Treasury Operations
- External Financing
- Invested Assets
- Enterprise Resource Allocation
Today, we'll hear from Eric Jordahl of Kaufman Hall for a brief overview of the firm's treasury and capital markets advisory services. Eric Jordahl is a managing director of Kaufman Hall and directs the firm's treasury and capital markets practice, which includes the firm's derivatives advisory business. He has extensive experience working with clients to develop and successfully execute a range of capital formation and risk management transactions and strategies.
Our thinking on this is grounded in two core considerations. The first is the increasing risk and complexity that clients are confronting across their operations and balance sheets. The second is that the only way to respond or the best way to respond to this complexity is to tightly integrate operations and balance sheet and make sure that all resources are making their best enterprise contribution. We have long been the best financial advisor in the country measured by bond and swap advisory activities, and nothing about that is going to change. What we are interested in doing, what we are working on doing is positioning ourselves to become the best balance sheet advisor and the best corporate finance advisor out there as well.
This is work that our firm has done for a very long time, and the work we do in treasury and capital markets in this area draws heavily on the skill sets and capabilities that are in other parts of our firm including our strategic planning practice and our financial planning practice. Across those collective efforts, we help clients assess their internal and external capital generation capabilities and then evaluate that capacity credit position and really capital capacity.
This is a newer part of our treasury and capital markets practice, and it focuses on helping clients do two core things. The first is to put in place a credit and security infrastructure that will best support capital formation and management over time. And the second is to think about their commercial bank relationships as a strategic asset that should be as carefully managed as any of their other assets. The way we focus on the second part, the commercial banking part, is particularly important in that we help clients catalog what they have and understand both whether the pricing for the set of services that they're using is reasonable, but also how those services and the price they're paying might relate to credit formation and the use of bank credit over time.
This has been the heart and soul of the treasury and capital markets practice, and I don't expect that's ever going to change. We've been the number one financial advisor on bond and swap transactions for a very long time. And we've achieved that position by helping clients do the right transaction with the right team at fair prices and in an efficient fashion. Our capabilities in this area are based on our commitment to investing in the best people and to securing the data and the technology foundation that we need to be truly independent advisors. A great example of this has been our commitment to data management and the build-out of a product that we refer to as FA Portal. We've poured an enormous amount of time and focus on this, and it's a tool that we use both within our practice to increase our independence but that we also make available to clients to make them capable of managing their positions in a more efficient fashion.
Well, Kaufman Hall is not an investment advisor, but we have come to understand that investment resources are too often managed in relative isolation. So what we're interested in doing is working with clients to bring this resource into much closer connection with operations and strategy, and we do this in four ways. The first is to help clients clearly define the role of investment resources within their organization. Second is to help them identify what type of investment advisor they want to work with. Third is to help them to go through coordinated and efficient process to identify or to select that investment advisor partner. And the fourth is to work with clients and the new investment advisor to bring invested assets into much closer coordination with the rest of the enterprise.
Kaufman Hall has developed a enterprise resource allocation framework that we're very proud of and that we've put in place for clients ranging in size of 200 million in liquidity up to 4 billion in liquidity. Basically, there's been a lot of focus on enterprise risk management. We're more interested in a concept of enterprise risk parody and really how the resources of an organization are deployed against various liquidity and risk claims. Our framework has four core components. The first is a very comprehensive mapping of risks or claims on liquidity. The second is an equally comprehensive mapping of the resources available to the organization. The third is the integration of resources and risk into an enterprise resource framework. And the fourth is the operationalization of that framework so that it's maintained over time.
The five areas we've discussed, credit and capital management, treasury operations, external financing, invested assets, and enterprise resource allocation framework collectively represent the pillars of the treasury and capital markets platform at Kaufman Hall. We're doing great work in each of these areas, but we're also working with clients to combine them into a reconfigured treasury platform that we believe is most responsive to the prevailing healthcare environment.