How the recent trend of increasing protectionism and slowing global economic growth would impact the trade finance hedge fund industry?
The trade finance gap is measured by an Asia development bank to be in the region of US$1.5 trillion dollars. Given the fact there are only 20 or so active trade finance funds tackling this issue, we do not expect that any slowdown in economic growth will adversely impact the trade finance hedge industry.
With the ongoing Sino-US trade tension weighing on the global hedge fund industry in general, how trade finance strategies might perform? Should the situation turn for the worse in near future?
For our strategy which supports the import/export of key commodities that form the lifeblood of a modern economy and not finished goods we do not believe it will adversely affect our strategy. Our fund and strategy has probably benefited from the turmoil as European and American banks have been seen to reduce their credit lines and exposure to emerging markets as a result.
Where the key opportunities lie within the trade finance hedge fund industry for the next few years, and how well is Tradeflow Capital positioned to benefit from the development?
We believe the traditional bank trade finance industry and hedge funds like ours will cooperate more and more, and continue to find synergies and ways to assist each other. We see what we do as complimentary and value-added to areas of trade finance in bulk commodity markets which are increasingly unprofitable and or becoming non-core markets for many Banks. Given our scalable digital trade finance infrastructure we believe our fund and investment management business is in a strong position to support Banks and SME firms around the world. Due to the low interest rate environment in many countries now we are positive for our growth plans in 2020 and investor appetite for yield has promoted us to launch a EURO Trade Flow Fund in January 2020 which will invest purely in Euro denominated commodity transactions.
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TradeFlow Capital Management
Investment Advisor to the USD & EURO TRADE FLOW FUNDS
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