How does the recent trend of increasing protectionism and slowing global economic growth impact the trade-finance hedge-fund industry?
The trade-finance gap is estimated by the Asian Development Bank to be roughly US$1.5 trillion. With only twenty or so active trade-finance funds in the market addressing it, we do not expect any cyclical slowdown in growth to materially affect the industry.
How might trade-finance strategies perform if Sino-US trade tensions worsen?
Our strategy supports import-export of bulk commodities — the lifeblood of any modern economy — not finished goods. We don't expect a deterioration in trade tension to harm our strategy. If anything, our fund has benefited from periods of turmoil: European and American banks have reduced credit lines and exposure to emerging markets, opening more space for non-bank trade-finance providers.
Where do the key opportunities lie over the next few years?
We believe traditional bank trade-finance providers and hedge funds like ours will cooperate more, finding synergies and value-added roles for each other. We complement areas of trade finance in bulk commodity markets that are becoming unprofitable or non-core for many banks. Our scalable digital infrastructure positions us well to support banks and SME firms globally — and the persistent low-yield environment continues to drive investor appetite for the asset class.