Waldo de Vleeschauwer has left Africa Merchant Capital and founded a new trade finance fund, called Global Trade Capital (GTC).
de Vleeschauwer was previously managing director of Africa Merchant Capital’s trade finance businesses, which he co-founded in 2016.
Based in London, GTC is backed by equity from a British family office, the name of which has not been disclosed, nor has the size of the fund. It is co-founded together with Robert Salem, who is CEO of Duration AM, a London-based asset manager.
Speaking to GTR, de Vleeschauwer, who takes on the title of chief investment officer, says GTC operates a global strategy and has four core focus products: trade receivables discounting for mid-market commodity traders; supply chain finance; letter of credit financing for tier two banks; and structured trade finance deals for select clients.
GTC becomes one of a growing number of funds emerging in the trade finance space over the last couple of years. It comes as regulatory requirements have prompted banks, which have traditionally dominated the market, to become more selective in the types of clients and deals they finance.
According to de Vleeschauwer, GTC’s main differentiator from other trade finance funds is that it is based on a securitisation structure, consisting of a junior equity tranche that mitigates potential losses for investors.
“The business plan from the outset was to create something that resembles a securitisation-type platform where you have got a manager with ‘skin in the game’ through an equity tranche within a portfolio, making it attractive for prospective debt/leverage investors,” he says. “In order to attract the lowest cost of capital and to be more competitive in this space, we have created a mechanism whereby institutional players, such as pension funds, insurance firms and other fixed income funds that like classic debt instruments, can participate with the knowledge that there is an equity first-loss tranche within the portfolio, which provides additional comfort.”
One of the benefits of this structure, he says, is that it allows GTC to offer more competitive rates to its customers.
Further down the line, GTC will also look to develop a credit default swap (CDS) product for the trade receivables asset class. This, de Vleeschauwer says, is an attempt to provide an alternative to traditional insurance.
“The idea being that the trade receivables CDS would replace traditional trade credit insurance products. It’s a credit derivative, and upon default of a credit, you swap your instrument for cash,” he says.
“That will be a very interesting dynamic, it’s forward-thinking, it doesn’t really exist yet, so it will be game-changing in this space,” he adds.
de Vleeschauwer expects the first capital to be deployed by the end of September, in the first instance funded by GTC’s own equity.
de Vleeschauwer has spent almost 15 years in various buy-side private debt and equity roles throughout Asia and Emea, with a particular focus on structured trade and working capital finance, securitisation, syndication, origination, asset and portfolio management across a variety of sectors. Prior to Africa Merchant Capital, he was head of structured finance and credit at GLI Finance, a London-based financier focusing on small and medium-sized companies in the US, UK and Europe.
Also joining the GTC team, Clint Walker has been appointed portfolio manager. Walker also moves from Africa Merchant Capital, where he worked as a transactor in the trade finance business, managing deal origination, structuring and performance.