A third source of demand for cash equivalents resulted from the adoption of more elaborate investment strategies by many institutional investors. For example, as more such investors used derivatives or short-selling as part of their overall strategies, they needed cash or cash-like instruments for margining and other collateral purposes.
Moreover, of course, as the amount of assets under professional management increased, the demand for safe, liquid investments also inevitably increased, since intermediaries need a place to park funds that are awaiting investment or needed to meet unexpected withdrawals.