White Oak Global Advisors has bought trade receivables financier Finacity from the US arm of collapsed supply chain finance firm Greensill.

Finacity originates, structures and places over US$100bn in trade finance receivables each year in more than 175 countries, which it says makes it the world’s largest non-bank trade finance platform.

Under its funding model, clients sell their invoices to a special purpose entity managed by Finacity, which then raises finance from banks or via debt issuance, or by selling the invoices to investors.

The company was originally founded in 2001 by founder Adrian Katz, who sold it to Greensill for an undisclosed amount in 2019, staying on as CEO and “substantive equity holder”. With the acquisition of Finacity, Greensill was able to add receivables securitisation capabilities to its offering, with Lex Greensill, founder and CEO of the now-defunct financier, saying at the time that this would be of “immediate value to our global client base”.

London-headquartered Greensill spiralled into insolvency in March after insurance cover lapsed and vital funding sources were frozen. Since then, claims have come to light that the fintech knowingly provided funding where there was no underlying business activity –  so-called “future receivables financing” – with the firm’s exposure to Sanjeev Gupta’s GFG Alliance group of companies coming under particular scrutiny.

In May, Gupta’s UK steelmaking business reportedly reached an agreement for a £200mn loan from White Oak, but this deal was short-lived: when the UK’s Serious Fraud Office announced it would investigate potential fraudulent trading and money laundering at GFG Alliance, the US asset manager walked away.

In the same month, during a proposed bankruptcy auction, Greensill agreed to sell Finacity back to Katz for US$24mn, according to Bloomberg, in a transaction that would be made up of a US$3mn cash payment and the forgiveness of US$21mn in deferred payments that were tied to Finacity’s annual revenue. A White Oak spokesperson tells GTR that this deal did not go through.

In August, Bloomberg reported that Greensill’s US unit had received court approval to sell Finacity to White Oak for US$7mn, following a deal with unsecured creditors, and an agreement with Katz that he would drop demands for the US$21mn in deferred payments. In return, according to Bloomberg, the bankrupt unit agreed not to sue Katz or other insiders.

When questioned by GTR, the White Oak spokesperson could not confirm the US$7mn sale price of Finacity or comment on the terms of the deal.

In a statement, White Oak says that Katz will remain as Finacity CEO and equity holder, and Finacity will operate as a standalone business, albeit working closely with White Oak in a number of areas where there are synergies – including White Oak deploying institutional capital on Finacity’s platform as part of its drive into what it says is a US$30tn market for asset-based working capital solutions.

“Everyone at Finacity is excited to be starting this new chapter of our story as part of White Oak,” adds Katz. “We have known the leadership at White Oak for a long time and are convinced that this move is absolutely the right one to enable Finacity to thrive. I am particularly excited about the new opportunities that collaboration with White Oak will open up through the combination of our market expertise and global scale.”