Trade finance an asset class for private credit funds

Technology advances and positive ESG considerations could help private credit reduce the global trade finance gap.

The International Trade and Forfaiting Association (ITFA) has acknowledged that banks alone will be unable to fully address global demand for trade financing and that there is a need to advance the evolution of trade finance as an asset class for alternative investors such as asset managers, insurance companies and pension funds.

A report published by the Alternative Credit Council (ACC) and international law firm Simmons & Simmons at the end of last year – Private credit and the trade finance opportunity – claimed that private credit investors were already playing a key role in supporting cross-border trade and that corporates value the faster execution times and bespoke financing structures developed with private credit managers.

Thibault Sandret_960.jpg
Thibault Sandret, bfinance

At first glance, trade finance is a no-brainer for private credit.

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