How Professional Investors Can Allocate to Short-Tenor Trade Finance
Short-tenor trade finance offers professional investors a way to deploy capital into real economy transactions with predictable repayment profiles and robust collateral structures. These investments typically range from 30 to 180 days, are self-liquidating, and are secured by enforceable claims on goods, receivables, or cash flows. The result is a yield profile that is insulated from equity market volatility while maintaining high visibility on capital flows.
Key Outcome:
Access to consistent, asset-backed returns through a strategy focused on disciplined structuring, collateral control, and short repayment cycles.
Why Short-Tenor Trade Finance Appeals to Professional Investors
- Capital is recycled multiple times per year, enhancing IRR
- Transactions are linked to specific, verified trade flows
- Collateral is tangible and independently controlled
- Limited interest rate sensitivity due to short maturities
- Ability to focus on commodity flows with established demand
Typical Transaction Profile
| Parameter |
Example |
| Tenor |
90 days from shipment |
| Collateral |
Confirmed letter of credit, warehouse receipt, or credit-insured receivable |
| Target Net Yield |
6 – 10% p.a. unlevered |
| Sectors |
Energy products, base metals, agricultural commodities |
| Jurisdictions |
OECD counterparties or emerging markets with mitigated risk structures |
Allocation Approaches
- Direct participation in syndicated trade finance deals arranged by a specialist
- Subscription to a dedicated trade finance fund with defined investment parameters
- Separate managed account tailored to investor-specific sector or jurisdiction preferences
Risk Controls and Mitigation
- All transactions documented under ICC rules such as UCP 600 and URDG 758
- Collateral control by independent inspection and logistics firms
- Counterparty credit analysis and KYC/AML screening
- Political and trade credit insurance where applicable
Discuss Your Allocation to Short-Tenor Trade Finance
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This content is intended for professional investors only. Investments in private trade finance transactions carry risk of loss and are not suitable for all investors. Returns are not guaranteed and depend on underlying transaction performance, counterparty creditworthiness, and market conditions. Prospective investors should review the full offering documents and consult with independent legal, tax, and financial advisers before investing.