Tradeteq, the tech provider for illiquid credit distribution, has introduced Tradeteq Access Lite, which is reportedly the “first-ever” marketplace for buy-side investors “to participate in the secondary trading of trade finance assets.’
More than 40 members of the Trade Finance Distribution Initiative (TFDi), the industry-led group that “sets the standards for global trade finance distribution, including leading asset managers, have already signed up to the platform.”
Participation is “now open to credit funds, enabling them to capitalise on the growing multi-trillion-dollar trade finance asset class.”
As noted in the update, trade finance is “a low-risk asset class based on the tangible flow of physical goods, making it less susceptible to volatility.” The asset class is “projected to reach $10 trillion by 2027 but the lack of a secondary market has so far restricted access to a small number of investors due to the need to repackage portfolio risk.”
Tradeteq Access Lite is “the latest step in Tradeteq’s mission to turn trade finance into a liquid asset class.”
Investment managers “get free access to a continuous deal flow from selected bank and non-bank originators and can manage the full end-to-end trading lifecycle.” This includes instant notification of deals and “the ability to match specific deal criteria, negotiate terms and execute trades.”
Investment managers also ‘get free membership to the TFDi, enabling them to collaborate with the world’s largest network of trade finance originators, along many of the leading credit insurers, asset managers and institutional investors.”
Tradeteq’s platform “complies with the ISO27001 and SOC 2 security standards, GDPR controls and other global security, safety and data protection requirements.” Users fully own and “control the collection, usage and distribution of their information and data.”
The lack of a secondary trading market “has left many corporates underserved when it comes to funding, contributing to a trade finance gap – the shortfall between supply and demand – which is estimated at $1.7 trillion. ”
By distributing trade finance assets to capital markets, banks “can increase their net interest income, free up their balance sheets and do more with less.”
Nils Behling, Co-Founder and CFO at Tradeteq, comments:
“Trade finance offers tangible benefits to investors looking for alternative assets – particularly in today’s volatile climate. It’s low-risk and offers yield pick-up and uncorrelated assets that pay above commercial risk spread. The big obstacle has been lack of access but Tradeteq Access Lite is a crucial step towards democratising the market, enabling investors to tap into its full potential.”