Asset Management

Asset managers launch global trade finance working group

Trade finance industry leaders and leading asset managers have joined forces to create a global trade finance working group dedicated to boosting the role of alternative lenders in the sector.

The working group will consolidate initiatives within the Alternative Credit Council (ACC), the global representative body for private credit fund managers and affiliate of the Alternative Investment Management Association (AIMA) to support the development of trade finance as an asset class. Trade finance is widely seen as a major growth area within the alternative investment sector.

Dr. Tom James, CEO and CIO of TradeFlow Capital Management says: "I applaud the ACC's efforts in this brilliant initiative which will bring greater awareness to a lesser understood yet vital part of the investments industry driving the global economy. Trade finance as an Asset class can deliver diversified and stable returns for investors whilst also delivering real world impact in the production and delivery of vital real world trade and commodity flows that drive our modern economies. This Group will engage with key stakeholders including regulators and allocators to support their understanding of trade finance as an asset class. Joining this Group aligns perfectly with TradeFlow's experience in this asset class and its mission to help reduce the growing trade finance gap faced by SMEs."

Sammy Fong, CEO of Singapore-based private debt manager EASTvine Capital, added: "This is an opportune time to discuss the merits of a well-executed trade finance strategy in an investor portfolio. While there is an increasing demand for alternative trade finance given the reduction of financing from traditional lenders, the current financial market conditions are also encouraging investors to look beyond the traditional investment opportunity set. We foresee growing investor interest in trade finance and also suggest that investors engage with investment managers to align objectives as part of their due diligence process. The global trade finance group is an excellent platform for transparent interactions."

The need for a global trade finance working group to support greater participation by alternative lenders in the trade finance sector was identified by a recent ACC research paper Private credit and the trade finance opportunity which found that "One of the biggest drivers of change is the retrenchment and greater balance sheet management of traditional lenders, who have historically been the largest providers of trade finance and key facilitators of cross-border business. This happens at a time when demand for trade finance has significantly increased, with firms adjusting their practices in response to Covid-19 and renewed interest in and pressures on global trade patterns."

The working group will work with trade finance specialists across asset managers, institutional investors, corporate treasury teams, data providers, family offices, insurance companies, professional advisors, institutions of higher education, and sovereign investors.

Kher Sheng Lee, Co-Head of APAC, Deputy Global Head of Government Affairs for AIMA, said: "Highlighting the opportunities at the intersection of asset management and trade finance are one of the key areas of focus for ACC and this group will bring together all corners of the trade finance space. I strongly encourage all individuals who are active in or looking at this space to join us in shaping the development of trade finance as an asset class."

Firms interested in joining the working group are invited to contact [email protected], Community and Partnerships Associate, AIMA.