Santander’s asset management arm has launched a new trade finance fund to invest in short-term real economy assets, backed by an initial capital contribution of €25mn.
The Luxembourg-registered fund has been established to bolster Santander’s illiquid alternative investment offering, the bank says. As well as investing in the fund, Santander says it is securing part of the risk and allowing institutional investors to co-invest “on an equal footing”.
A Santander spokesperson tells GTR that building on the “market-leading trade finance position” held by its corporate and investment banking business “is part of a conscious strategy to make the group more agile in the way it supports its clients and investors”.
The fund will be managed by global head of trade finance investments Bertrand de Comminges, who joined Santander Asset Management from HSBC in August last year.
Its investment committee comprises former HSBC executive Jean-François Lambert, who is also founder and managing partner of Lambert Commodities, and treasury management industry veteran Tom Jack.
“At times when trade finance has been under the spotlight, it is good to see that reputable banking groups like Santander are taking such initiative with professionalism and expertise,” Lambert tells GTR.
“I am delighted to be associated with this exciting development.”
The fund’s portfolio will cover Europe, the US and Asia, and will consist of 350 companies, the bank says. Individual losses are capped at 10% and its average credit rating will be BBB+.
The launch bolsters Santander’s long-standing asset management offering, which currently has more than €180bn in assets under control and specialises in the European and Latin American markets. Its illiquid investments team, led by Borja Diaz-Llanos, was founded in 2019.
The announcement comes as industry experts are increasingly touting investment funds as a means of supporting real economy transactions while generating higher yields than fixed income and corporate bonds.
Non-bank investors are also in a position to deploy emerging technology as a way of limiting risk, de Comminges said during a funds-focused GTR webinar last month.
“We can use big data, artificial intelligence, and blockchain to reduce risk to make the investors much more comfortable and increase security on data flows,” he said at the event.
At the same time, the global trade finance gap has grown significantly over the past year. Rising demand from companies is not being met by the banking sector, with many traditional institutions seeking to scale back their exposure to the trade and commodity finance market.