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GAM Kimura Commodity Trade Finance Fund

Reasons to Invest

Structural opportunity

The withdrawal of commodity trade financing by banks to SMEs, for regulatory reasons, has created a structural trade finance shortage and an opportunity for non-bank lenders to step in.

Uncorrelated returns

Clients have access to a differentiated income stream, with returns being largely uncorrelated to wider public or private financial markets.

Predictable and low volatility

In our view, the fund benefits from predictable, stable cash flow generation and returns, relatively low volatility due to lack of exposure to direct commodity price risk and low default risk.

Scalable

Global diversification in terms of lending location, counterparty, region and debt structure ensures a scalable strategy, in a changing and growing trade finance landscape.

Our Edge

Strong pedigree

The team has decades of experience in commodities resulting in a strong network of contacts. Competition is limited in this space, placing Kimura as a market-leading source of alternative lending.

Disciplined process

Stringent due diligence and risk management processes ensures established, repeatable transactions are sourced and set within a proven and tested global governance framework.

Extensive risk management approach

Loans are typically self-originated, tailored and asset-backed, and the team maintains full control over cash flows, assets and contracts.

ESG focus

The application of ESG principles during the process and within the firm allows the team to seek to create sustainable returns for investors, whilst mitigating ESG risk.

Philosophy and Process

Investment Philosophy

The team believes the reduction of lending by banks, for regulatory reasons, has made trade finance significantly harder for SMEs to access and this has increased demand for independent, alternative sources of finance, while the risk profile at the underlying transaction level remains unchanged. The team seeks to exploit this structural opportunity through self-originated lending using a variety of financing structures.

Investment Process

The process focuses on rigorous due diligence of borrowers and efficient execution and monitoring of structured, asset-backed loans. A longstanding reputation and network of over 500 relationships globally, enables the team to source potential deals. They focus on borrowers in first world countries, while transactions are usually secured against underlying commodities skewed toward Asia, Africa and South America. In-depth credit and commercial due diligence helps the team determine the soundness of the borrower and deal price. Following unanimous IC approval for the deal to proceed, a structured, a consistent legal process ensures efficient loan execution. The team actively manages and monitors the portfolio, with the deal pipeline playing a key role. Treasury funds with daily liquidity can be used to balance incoming investment with outgoing loans.

1. Deal origination

  • Established relationships enable deal sourcing
  • Conduct preliminary assessment of potential transactions

2. In-depth due diligence

  • Total net worth of borrower is key determinant in final deal price
  • Credit paper presented to Investment Committee for unanimous approval

3. Loan execution

  • Regional legal services, engaged via tender
  • ‘Six eye’ risk management process prior to loan approval and execution

4. Manage and monitor deals

  • Strong focus on cash flow management and diversification.
  • Ongoing monitoring of current portfolio and proposed pipeline

Investment Team

Kimura Capital LLP is a leading commodity trade finance firm, based in London. Kimura is responsible for investment management, risk oversight and operational control for the fund. All investment decisions require unanimous approval by the Investment Committee (IC), comprising Kristofer Tremaine, Founder and CIO, Neil West, Chairman, and Alan Gordon, Head of Trade Finance.

Founded in 2015, Kimura manages commodity trade finance, structured trade finance and alternative lending strategies, focusing on the energy, metals + mining, soft commodities and agriculture sectors. The management team has counterparty relationships with more than 500 companies at a commercial trader and management level, enabling strong in-house deal origination ability.

Kimura’s strategic partnership with GAM enables access to a wide range of distribution and marketing functions.

We differentiate ourselves through our ability to self-originate transactions, control the loan structure and maintain a strong repeat borrower pipeline, as well as by our experience as commodity traders and lenders and our relationships with global commodity trade finance third parties – these ensure that we can source the best deals possible, and provide attractive, risk-adjusted returns to investors.”
Kristofer Tremaine Founder and CIO of Kimura Capital

Fund Information

Key Risks

Capital at risk

All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

Credit Risk / ABS

The issuer of asset-backed securities may not receive in full the amounts owed to them by underlying borrowers, affecting the performance of the Fund.

Credit Risk / deposits

Investment in deposits with financial institutions may be subject to default by the issuer. Some of the amounts deposited may not be returned to the Fund.

Interest Rate Risk

A rise or fall in interest rates causes fluctuations in the value of fixed income securities, which may result in a decline or an increase in the value of such investments.

Market Risk / emerging markets

Emerging markets will generally be subject to greater political, market, counterparty and operational risks.

Concentration Risk

Concentration in a limited number of securities and industry sectors may result in more volatility than investing in broadly diversified funds.

Operational risk / third parties

Investments in other funds have direct and indirect dependence on other service providers. The Fund may suffer disruption or loss in the event of their failure.

Resources

Fund Profile - GAM Kimura Commodity Trade Finance Fund

Risk management at GAM

Contacts

*There is no guarantee that targets will be achieved

GAM KIMURA COMMODITY TRADE FINANCE OFFSHORE FEEDER FUND LIMITED has registered office at MG Management, PO Box 30116, 2F Landmark Square, 64 Earth Close, Seven Mile Beach, Grand Cayman, KY1-1002, Cayman Islands