Confidential – For Investment Committee Review: The FG Capital Trade Finance Investment Vehicle (the “Fund”) is available solely to qualified, accredited investors. This material is not a solicitation to the public.
Trade Finance Investment Vehicle: Collateralised Short-Term Credit Strategy
The Fund originates senior secured, self-liquidating trade finance exposures referencing confirmed commodity and procurement flows. Target return is 7 % net per annum with principal safeguarded by perfected security interests, credit insurance, and conservative advance rates. Average loan tenor is 30–180 days, enabling rapid capital rotation and systematic reinvestment.
Sector Rationale
• Historical default ratio < 0.25 %
across documented trade receivables (ICC Trade Register, 2024).
• Collateral comprises readily marketable commodities and negotiable shipping documents.
• Short duration mitigates interest-rate volatility and macro event risk.
• Minimal correlation to traditional fixed-income and equity benchmarks.
Risk-Mitigation Architecture
| Control Layer | Objective | Implementation Protocol |
|---|---|---|
| Perfection of Security | Ensure enforceable first-priority claim | Warehouse control agreements, UCC filings, possession of original BLs |
| Advance-Rate Discipline | Maintain borrower equity buffer | Maximum 80 % LTV, recalculated prior to each drawdown |
| Credit & Political Risk Insurance | Transfer obligor and sovereign risk | AA-rated policy underwriters; Fund named sole loss payee |
| Third-Party Collateral Monitoring | Independent validation of quantity and grade | Global inspection majors engaged at loading and discharge |
| Self-Liquidating Cash Sweep | Automated loan amortisation | Buyer funds routed to pledged collection accounts, extinguishing exposure upon settlement |
Portfolio Construction Parameters
• 50–70 active positions across base metals, energy by-products, and agricultural inputs.
• Single obligor exposure capped at 7 % of NAV; single jurisdiction exposure capped at 20 %.
• Real-time mark-to-market via exchange quotations or third-party valuation agents.
• Liquidity buffer of 5 – 10 % NAV for redemptions and margin adjustments.
Fund Terms (Summary)
Structure:
Cayman master-feeder.
Target Return:
7 % net (SOFR + spread).
Subscriptions / Redemptions:
Monthly, with 30-day notice.
Minimum Commitment:
USD 10 million.
Fees:
1 % management; 10 % performance above 5 % hurdle; no catch-up.
Audit / Administration:
Big-Four audit; tier-one administrator; independent directors.
Technical FAQ
Q: Source of Repayment?
A: Contracted purchaser proceeds, secured by assignment of receivables and controlled collection accounts.
Q: Stress-Test Results?
A: 25 % price shock and 60-day payment delay scenario projects < 0.8 % NAV impact, assuming enforcement of collateral sale at 90 % of spot.
Q: Sanctions & ESG Screening?
A: Systematic KYC/AML, World-Check, and EU/OFAC list clearance; forced-labour and environmental due-diligence undertaken for all cargos.
Q: Interest-Rate Sensitivity?
A: Duration < 0.25; coupon resets each rotation cycle, materially insulating NAV from rate movements.
Documentation Access
Investment Committee members may request the private placement memorandum, due-diligence questionnaire, and latest portfolio statistics via the secure investor portal.
This document is provided for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase securities. Offers are made solely pursuant to the Fund’s confidential offering documents. Past performance is not indicative of future results. Investments in the Fund involve risk, including possible loss of capital.
