Entrepreneurship Even in Treasury

Google wins the 2012 Alexander Hamilton Award for Overall Excellence.

Treasurer Brent Callinicos, CFO Patrick Pichette and some of the treasury team Treasurer Brent Callinicos, CFO Patrick Pichette and some of the treasury team

Google wins the Alexander Hamilton Award for Overall Excellence for the first time this year, having collected awards in six of the seven categories, including two Golds for Best Green Strategy and Financial Risk Management.

The most notable thing about Google’s awards, aside from the sheer quantity, is the range of endeavors represented. Some of its winning projects involve such typical treasury activities as hedging investments, integrating the treasuries of acquisitions and streamlining treasury technology. But Google also won for its investments in renewable energy and for the credit card it is testing as a way of supporting the small and midsize businesses that buy ads.

One of the areas Callinicos is passionate about is clean energy, and for the second year in a row, Google has taken the Gold Award in the Best Green Strategy category. Its award last year was for an innovative method of purchasing energy from a wind farm. Now Google has moved on to investing in green energy generation, with commitments to date of $915 million.

Investing in renewable energy projects makes use not only of Google’s balance sheet, but its energy expertise, Pichette notes. “Because we have an engineering team at Google that understands these technologies very, very well, we have in a way a great advantage to analyze like very few people can, the real risk profile for these projects.”

A Blank Sheet of Paper

Callinicos recalls that when he joined Google in 2007, treasury had seven employees and no systems, a situation he characterizes as starting with a “blank sheet of paper.”

Google is also notable for its huge cash position, which totaled $43 billion at the end of the second quarter. Treasury manages about 70% of the cash internally, with a team of about a dozen handling investments such as Treasuries, agencies, mortgage-backed securities and foreign government bonds, while 14 external managers oversee the remainder of the investments, including any that require credit research.

Asked about the challenges he faces, Callinicos says it’s choosing among all the innovative ideas the treasury staff produces.

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