- Rasmala Trade Finance Fund has invested in 876 transactions totalling $491m across 31 countries
- Institutional investor interest accelerates in search of uncorrelated returns
- Investors benefit from increased globalisation of supply chains
Rasmala Group (“Rasmala” or the “Group”, a leading alternative investment group, announced that the Rasmala Trade Finance Fund (“Fund”) has crossed the $250m threshold in assets under management. The Fund has generated an annualised return of 4.45% since its inception in September 2014.
Rasmala said that heightened demand from asset managers to access genuinely uncorrelated investment products has seen the Fund grow significantly in just the last year. The Fund is proving to be popular among institutional investors and family offices seeking uncorrelated returns.
It added that it expects this trend to continue following the correction in the bond market, as institutions continue to diversify their portfolios beyond equities and bonds.
As supply chains become seamless across geographies, businesses often outgrow domestic sources of funding. In addition, banks have been forced by regulators to be more constrained in their lending to SMEs due to changes in the amount of regulatory capital that they have to hold against such exposures.
Rasmala said that a global shortage of funding for trade-related transactions in specific segments of the market, coupled with the increasing globalisation of supply chains, has led to robust demand from businesses for short-term, cross-border, working capital funding.
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Rasmala explained that the Fund provides its investors with access to investments in short-term, structured trade exposures, including but not limited to commodity finance, supply chain finance and export finance.
The Fund has very strong geographical and sectoral diversification. The Fund has to date invested in 876 transactions totalling $491m across 31 countries, including the UAE, United States, Brazil, Saudi Arabia, Singapore, South Africa, UK and China. It has provided loans to businesses in 22 industries, including agriculture, chemicals, mining, energy and the automotive sector.
Transactions invested by the Fund include:
- A short-term financing facility for a listed Brazilian agribusiness to fund the purchase of agricultural inputs secured against a crop which has been pre-sold to a $40bn+ global agribusiness and food company
- A financing facility for a $1.6bn revenue commodities processing and trading business, for the purchase, transport and sale of commodities, including rice, sugar, grains, iron ore and coal to their customers across the globe.
Zak Hydari, Chief Executive of Rasmala, commented: “The Rasmala Trade Finance Fund has been a great success because it delivers stable uncorrelated returns to our investors and has global appeal.”
Hydari added: “The success of the Rasmala Trade Finance Fund also demonstrates our ability to develop and scale alternative investment products. Rasmala will continue to invest in product development and our product pipeline remains strong.”
Eric Swats, Senior Executive Officer of Rasmala Investment Bank Limited, commented: “The underlying volatility in equities and fixed income, mean that we expect inflows into the fund to remain strong. The opportunities for institutions to invest in truly uncorrelated assets are relatively limited, and we are seeing more interest in our trade finance fund as a result.”
“The Rasmala Trade Finance Fund is very well-diversified across a wide range of geographies and industries, giving Rasmala’s investors the opportunity to benefit from the accelerating globalisation of supply chains worldwide, and the demand from large businesses for finance to drive that expansion.”