Thursday, 11 February 2016
Last updated 15 hours ago
Apr 20 2012 | 7:34am ET
African investment specialist Scipion Capital has opened its Commodity Trade Finance Fund to U.S. investors.
Launched in 2007, the CTF fund has generated positive performance each month since. Total returns since inception exceed 68% for a net average annualized return of 12%.
The fund provides loans to companies and financial institutions trading in soft commodities in African markets but “[c]onscious of food price volatility created by speculators and gamblers in commodities prices,” Scipion says it lends only to those with “long inventory and a genuine involvement in the supply chain” and does not take positions in commodities itself. The firm attributes its success in volatile markets to a focus on staple commodities like coffee and salt, demand for which is largely unaffected by macroeconomic factors.
Hoping to expand its investor base in the U.S. and take advantage of what it sees as the growing popularity of “commodities-related and alpha-generating strategies” there, Scipion has launched a marketing campaign directly targeting American investor bases. The firm’s head of business development, Chris Jenkins, a Bear Stearns vet, is leading it.
Scipion says the ongoing sovereign debt crisis and Basel 3 regulations increasing the amount of capital banks must hold against trade finance loans have made even more commodities supply chain companies reach out to specialist funds for finance.
The firm's founder and CIO Nicolas Clavel said in a statement: “Our previous experience within large U.S. institutions stands Scipion in good stead for the next stage of the fund’s expansion. We made a deliberate decision to wait until Scipion and the CTF fund were in a position to attract and cope with demand from the U.S. With such a large investor market, the timing of when to enter the U.S. is key. The make-up of the firm and track record of the fund have convinced us that that time is now.”
As part of the marketing campaign, Scipion has also made its other investment strategies available to the U.S. market, including the Scipion Ai40 Index Tracker Fund.
The CTF Fund has a minimum investment of US$500,000 and targets funds of funds, high-net-worth individuals, family offices and institutional investors. It provides financing for a range of commodities assets, from soft commodities such as cocoa, salt, tea and coffee to minerals from mining, such as tin and copper.