Asset managers launch global trade finance working group

The working group brings together alternative lenders and the trade finance sector to support the development of trade finance as an asset class.

Remit to raise awareness of trade finance amongst investors and address challenges to greater participation by alternative lenders in the sector.

Membership includes global asset managers with activity co-ordinated out of Singapore.

SINGAPORE,Feb. 6,2023 -- 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 opportunitywhich 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 contactzang@aima.org,Community and Partnerships Associate,AIMA.

About ACC

The Alternative Credit Council (ACC) is a global body that represents asset management firms in the private credit and direct lending space. It currently represents 250 members that manage over US$800bn of private credit assets.

The ACC is an affiliate of AIMA and is governed by its own board which ultimately reports to the AIMA Council.

ACC members provide an important source of funding to the economy. They provide finance to mid-market corporates,SMEs,commercial and residential real estate developments,infrastructure as well the trade and receivables business.

The ACC's core objectives are to provide guidance on policy and regulatory matters,support wider advocacy and educational efforts and generate industry research with the view to strengthening the sector's sustainability and wider economic and financial benefits.

Alternative credit,private debt or direct lending funds have grown substantially in recent years and are becoming a key segment of the asset management industry. The ACC seeks to explain the value of private credit by highlighting the sector's wider economic and financial stability benefits.

About AIMA

The Alternative Investment Management Association (AIMA) is the global representative of the alternative investment industry,with around 2,100 corporate members in over 60 countries. AIMA's fund manager members collectively manage more than US$2.5 trillion in hedge fund and private credit assets.

AIMA draws upon the expertise and diversity of its membership to provide leadership in industry initiatives such as advocacy,policy and regulatory engagement,educational programmes and sound practice guides. AIMA works to raise media and public awareness of the value of the industry.

AIMA set up the Alternative Credit Council (ACC) to help firms focused in the private credit and direct lending space. The ACC currently represents over 250 members that manage US$800 billion of private credit assets globally.

AIMA is committed to developing skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the first and only specialised educational standard for alternative investment specialists. AIMA is governed by its Council (Board of Directors).