{"id":95908,"date":"2021-08-04T14:53:15","date_gmt":"2021-08-04T14:53:15","guid":{"rendered":"https:\/\/www.gtreview.com\/?p=95908"},"modified":"2021-08-04T14:53:15","modified_gmt":"2021-08-04T14:53:15","slug":"barak-eyes-recovery-with-two-new-funds-winds-down-three-others","status":"publish","type":"post","link":"https:\/\/www.gtreview.com\/news\/mena\/barak-eyes-recovery-with-two-new-funds-winds-down-three-others\/","title":{"rendered":"Barak eyes recovery with two new funds, winds down three others"},"content":{"rendered":"

Barak Fund Management is winding down three funds and launching two new ones, while widening its focus to the Middle East, as it seeks to rebuild after suspending investor withdrawals for nearly 18 months.<\/p>\n

The Africa-focused alternative lender ran into difficulties in March last year, freezing redemptions and suspending some of its funds. Bloomberg<\/em> has since reported that more than half of its investments were stuck in illiquid assets, meaning it was unable to return funds quickly to investors when the Covid-19 pandemic struck.<\/p>\n

\u201cBarak was hopeful that markets would stabilise and that the suspensions would be lifted,\u201d it says in a statement issued last week. \u201cUnfortunately, this did not transpire, as Covid\u2019s second and third waves impacted economic recovery.\u201d<\/p>\n

The company says it remains confident in alternative assets as a class and in the sectors it targets for investment, but that the pandemic is expected to continue impacting liquidity for at least 18 months.<\/p>\n

The suspensions have been lifted on three of its funds, but Barak says that as a result of those forecasts, it \u201chas decided to wind down the remaining three funds in a controlled way to balance those investors requiring redemption with the need to maximise value for all investors\u201d.<\/p>\n

Its two new funds \u2013 a term fund and high-yield fund, both targeting emerging markets \u2013 will pursue private credit lending opportunities \u201cas key emerging markets recover post-pandemic\u201d, Barak says.<\/p>\n

Emerging market growth requires growth capital, yet banks are expected to focus on portfolio restructuring rather than new lines of credit, the company explains.<\/p>\n

\u201cNon-bank specialist financial lending institutions such as Barak are therefore well placed to step in, and selectively provide flexible, bespoke solutions to borrowers whilst providing investors with attractive, risk adjusted returns,\u201d it says.<\/p>\n

Documentation on the new funds should be circulated to investors by the end of this month, it says.<\/p>\n

Barak also plans to open an office in the Abu Dhabi Global Market, a free zone and international financial centre, and is in discussion with local regulators about obtaining a licence.<\/p>\n

If approved, it says the Abu Dhabi-based funds will have a \u201csimilar investment strategy\u201d to those pursued in Africa, but with an expanded geographic focus on the Middle East.<\/p>\n

Barak says it already has support from investors in the region, some of which have carried out recent due diligence on the company, it adds.<\/p>\n

It adds it is also creating a platform for a Chinese state-owned enterprise looking to partake in African and Middle Eastern trade.<\/p>\n

Prior to last year\u2019s crisis, Barak\u2019s flagship trade finance fund had grown significantly since its launch in 2009, propelled by banks\u2019 wariness of the trade finance market in Africa. By 2018, it had more than US$1bn under management, extending loans to around 150 borrowers and delivering consistent returns to investors.<\/p>\n

Bloomberg <\/em>reported in March this year that at the time of suspension, the fund\u2019s exposure was spread over 97 borrowers and covered sectors such as coal, consumer goods and agricultural supplies, according to restructuring documentation.<\/p>\n

Barak has also faced complaints from whistleblowers, revealed by Bloomberg <\/em>shortly after the funds were frozen. Two employees had raised concerns over the quality of collateral linked to certain loans, while another warned some assets were overvalued, it reported.<\/p>\n

In response, the company issued a statement saying the allegations had been reviewed by its compliance officer, independent legal counsel, and non-executive fund directors. The issue \u201cwas resolved in June 2020 on the basis that there was no evidence of wrongdoing or fraud\u201d, it said.<\/p>\n

Barak added that the concerns were raised \u201clong after the events linked to the allegations took place\u201d, and only after redundancy processes had started that affected two of the three complainants. The third was assumed to be a former employee, it said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Barak Fund Management is winding down three funds and launching two new ones, while widening its focus to the Middle East, as it seeks to rebuild after suspending investor withdrawals for nearly 18 months. The Africa-focused alternative lender ran into difficulties in March last year, freezing redemptions and suspending some of its funds. Bloomberg has …<\/p>\n","protected":false},"author":63221,"featured_media":80236,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"apple_news_api_created_at":"2021-08-04T14:53:19Z","apple_news_api_id":"9a2a6677-971b-4d0a-8e13-0bd2a7b7d68b","apple_news_api_modified_at":"2021-08-04T14:53:19Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/Amipmd5cbTQqOEwvSp7fWiw","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"middle","apple_news_slug":"","apple_news_sections":"[\"https:\\\/\\\/news-api.apple.com\\\/sections\\\/494c4b45-9ab7-437a-9851-cfd8f04a08ba\"]","apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[4],"tags":[16318,6926,21333,21332,15484],"acf":[],"apple_news_notices":[],"yoast_head":"\nBarak eyes recovery with two new funds, winds down three others | Global Trade Review (GTR)<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.gtreview.com\/news\/mena\/barak-eyes-recovery-with-two-new-funds-winds-down-three-others\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Barak eyes recovery with two new funds, winds down three others\" \/>\n<meta property=\"og:description\" content=\"Barak Fund Management is winding down three funds and launching two new ones, while widening its focus to the Middle East, as it seeks to rebuild after suspending investor withdrawals for nearly 18 months. 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