When Eli Lilly & Co. announced its $6 billion acquisition of Imclone Systems in the fall of 2008–its biggest deal ever–the financial markets were collapsing and the outside funds in which Lilly had invested a portion of its cash were falling right along with them. Thomas Grein, treasurer and vice president of the Indianapolis-based pharmaceutical company, which had net income of $2.6 billion on $11.2 billion of revenue in the first half of 2010, says the company first started hiring outside managers in 2000. They provided Lilly with some additional returns in the first part of the decade, but the credit crunch of 2008 was less kind, he says, and one manager was especially troublesome.

"We harvested cash from that manager and a number of others so we would, first of all, be able to reduce debt requirements around the acquisition, but also because of [the investment managers'] performance levels," Grein says.

Since then, Grein's treasury has managed most of the company's cash in-house, investing directly in money market funds and especially commercial paper.