London-based credit asset manager Channel Capital Advisors has hired Alok Kumar in the newly created role of head of portfolio analysis for trade finance.

Having started in April, Kumar has been tasked with working across all of Channel’s trade finance funds, and is responsible for the initial evaluation and structuring of deals, as well as certain aspects of portfolio management activities.

He rejoins Channel after a brief stint at cross-border supply chain finance platform Finverity, where he moved to take on the post of chief risk officer in 2019.

Kumar spent nearly three years as risk management officer at Channel prior to the move, having previously held roles at several banks in India, including Kotak Mahindra Bank, Union Bank of India, HSBC and HDFC Bank.

Channel’s chief investment officer, Paul Wilson, tells GTR that this latest appointment has partly been driven by a perceived change in trade finance risk over the past 12 months in the wake of the Covid-19 pandemic.

“We’ve brought in a three line of defence risk model, which is a well-known risk governance model within banks. The first line of defence from a risk point of view is the deal team, which Alok is very much part of. He’s been brought onboard to be our first line of defence in terms of sourcing deals, but also liaising directly with the clients, structuring, and importantly analysing the risk to see if it’s even worthy of consideration,” Wilson says.

The other two lines of Channel’s risk approach, Wilson adds, are the risk team and the risk control executive.

When Channel launched its first trade finance fund – a sharia-compliant fund – in July 2019, Wilson said at the time that it would launch other, and more conventional, funds in the coming months.

A new trade finance fund was initially mooted in early 2020, and in November last year, Dutch firm NN Investment Partners (NNIP) announced it was teaming up with Channel to launch such a fund.

Wilson tells GTR that Channel’s initial sharia-compliant fund generally has an average deal ticket size of around US$5mn, and the total assets size is still “relatively small” at less than US$100mn. He adds that the firm is focusing on expanding the fund this year.

Speaking about the conventional trade finance fund, which is currently in the process of being set up, he says: “The fund isn’t quite live yet, we’re at the pre-launch fund marketing stage. When it launches, Channel will work to find the deals, choose the ones that we think should be considered and are eligible, and the NNIP investment committee will then decide whether to give a green light to a transaction.”

“We will generally look for deals that are trade related, are short-dated with a maturity of less than two years, and have a credit risk rating somewhere in the crossover zone of BBB-/BB+. In terms of ticket size, we will target deals of between US$5mn and US$15mn,” he adds.