Why don’t More Institutional Investors buy Supply Chain Finance Assets?

As someone said, its all about risk versus reward tradeoffs.   And that certainly applies to SCF.  Just what is SCF anyway?  Its like asking 5 accountants from the same H&R Block office to do your taxes and having 5 different results.

Yes, there have been mighty efforts to provide definitions – see ICC, but definitions dont get upheld in court, contracts do. And that’s where a General Mills program run by three different institutions to provide early pay to their supplier base are three entirely contractually different programs.

So why does all this matter now?

Well for one, we have been hearing about how hungry non banks are for these assets for good reasons – low fixed income yields (or even negative), banks burden by compliance and regulatory capital issues, amongst some of the key reasons.

As banks and innovative platform companies have sought to bring these assets to non-bank funders, the pace of adoption amongst broader capital markets and institutional investors has been slower than expected. With a lack of diversity in high quality, short-duration investment products, what is keeping non-bank funders from adding SCF assets to their investment portfolios?

Join Trade Financing Matters on Thursday September 14th, as we host a webinar with CEO Tom Dunn of Orbian, one of the innovative platform originators to succeed in reaching non-bank funders, Managing Principal Adam Dener of Fermat Capital Management, a specialty investment management firm with an investment strategy in SCF, and myself as we discuss the hurdles to bringing SCF assets to broader capital markets.

Key topics for the webinar include:

  • Discussion about the past, present and future of SCF origination and distribution
  • Common barriers of execution for non-bank funders
  • The appeal of SCF assets to non-bank funders
  • How non-bank funders view SCF as a piece of their broader investment portfolios

I am sure one hour cant do this topic justice, but we will certainly try.

Join myself, Tom and Adam by registering for the webinar here.

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