Benefits of Offshore Diversification Webinar Replay

On July 25, 2019,  Gloria Nelund, Founder and CEO of TriLinc Global, and Paul Sanford, Chief Investment Officer, hosted an educational webinar – The Benefits of Offshore Diversification.

The webinar covered several topics, including:

  • Diversification defined
  • Key benefits of diversification
  • Importance of global diversification
  • Ideal international diversification

 

Click here to download a copy of the webinar deck.

Impact Investing: Can Funds Achieve Both Social Impact And Returns At Scale?

The following article was published by the London School of Economics and Political Science online in the LSE Business Review. Click here to view.


Helping the common good while making money is difficult but possible, with robust methodologies to identify and seize such opportunities, write Feng Li, Gianandrea Giochetta and Luigi Mosca

Popular opinion has it that ‘investing for the common good’ has gone mainstream. Yet our research finds that only a small proportion of funds has consistently generated market rate return and measurable social and environmental impact at large scale – especially in capital-starved emerging markets’ small and medium enterprises (SMEs), often deemed as risky and unattractive by mainstream investors. With investing for return and impact, known as impact investing, only selected opportunities exist. And it takes particular leadership skills, professional expertise and organisational setup to tackle them.

 

What is impact investing?

The need for impact investing has arisen from the persistence of societal challenges and the inability of existing institutions to eradicate them. Yet despite growing enthusiasm for such goals, there is still no consensus on what impact investing is. This is reflected in the huge variations in the estimated size of assets under management, from $502 billion by the Global Impact Investing Network (GIIN), to $30.4 trillion by the Global Sustainable Investment Alliance. Such lack of conceptual clarity and rigour causes confusion and dampens investor expectations. GIIN defines impact investing as“investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return”.

Unlike socially responsible investment (SRI) or environmental, social and governance (ESG) investing, impact investing is not just about avoiding “sin stocks”or “do-no-harm”, but also actively deploying capital to address social and environmental objectives while generating financial returns for investors. It requires intentionality: portfolio companies must proactively track, measure and report on their social and environmental impact. If successful, impact investing can unlock substantial capital from mainstream investors.

 

Challenges and opportunities for impact investing

We conducted extensive research of institutional investors and their portfolio companies. The result, however, has been disappointing. Most funds can deliver return or impact, but very few deliver both consistently at large scale. ‘Impact washing’ (particularly ‘green washing’) is rampant. According to Confucius, “he who chases two rabbits catches neither.” The challenge for impact investing is first to demonstrate that it is indeed possible to catch two rabbits at the same time, and then develop robust methodologies to identify and seize such opportunities.

For impact investing to scale, products must be capable of addressing a range of institutional needs, including the ability to absorb large pools of capital, adequate liquidity and robust risk management practices while generating measurable return and impact. These have traditionally been met through investment strategies targeting blue chip securities. Such an approach, however, results in channelling funds where it is harder to proactively generate impact, as bondholders and minority shareholders have limited opportunities to directly influence senior management teams of large corporations. Furthermore, blue chip securities are concentrated in mature markets, while the greatest need for impact capital is elsewhere. The IMF estimates a $700 billion unmet credit demand globally in terms of debt financing to emerging markets SMEs, a niche where every $1 invested contributes a further $13 to the local economy.

From a financial perspective, a supply-demand mismatch of this magnitude represents a significant opportunity, while from an impact point of view, it highlights the imperative of channelling more capital to where it matters the most. Nevertheless, institutional appetite for emerging market SME financing, particularly fixed income, remains marginal, associated with its reputation for high risk and low return.

“The highest calling of impact investing is to increase the amount of capital being invested in places, companies, products, and services that have significant social benefits”. However, the momentum has been gained predominantly in listed security markets through strategies such as exclusionary screening, positive screening, or active ownership. Since investors in listed securities can only achieve impact by, at best, influencing responsible behaviour through proxy voting, active ownership and shareholder activism, impact investing should focus more on private capital markets, through means such as venture capital, private equity and private debt. This is where investors encounter most challenges. Managerial guidance is urgently needed.

 

Is it possible to achieve return and impact at large scale?

Our research has found that successful examples of impact investing remain rare, particularly those consistently generating market-rate return and measurable impact at large scale. Over the last ten years, we engaged with a large number of institutional investors and their portfolio companies purported to deliver return and impact. Within the niche of SME lending in emerging markets, we have found only a handful of institutional players operating in the segment, and TriLinc Advisors LLC (TriLinc) stood out as an exemplar. Its flagship fund, TriLinc Global Impact Fund (“TGIF”), has made over $1 billion in loans to 82 businesses in 36 countries since 2013, delivering a consistent unlevered net annual return of seven to nine per cent to investors and measurable impact using established international standards. The experience of this case study illustrates that impact investing is indeed possible, but very difficult to do. It requires special leadership skills, professional expertise and organisational setup to identify suitable opportunities and seize them. Importantly, the success of TriLinc can be replicated.

 

Managerial implications

Our research shows that specialising in fixed income – which is the largest capital market – rather than other asset classes, brings a huge potential for scaling up impact investments. The case is also unique in that it focuses on emerging markets, servicing primarily undercapitalised SMEs in developing countries. The TriLinc success stems from its ability to distil a simple yet actionable strategy, structure an investment product matching institutional expectations, and execute it through an effectively configured operation. A series of managerial considerations also mattered, an area little explored in the context of impact investing.

The case demonstrated that it pays to focus on less efficient markets where greater arbitrage opportunities may be found. The specific niche covered by TriLinc is vast and there are opportunities for other players to enter this segment. A similar approach may be applied to other market niches demonstrating such characteristics.

From an impact perspective, the challenge is to identify targets that are both realistic and measurable using established international standards. Rather than pursuing complex objectives, it may be preferable to aim for goals with a high probability of success and that may be achieved over a relatively short time span.


CASE STUDY

TriLinc Global Impact Fund (TGIF): impact investing in an unloved market niche

TriLinc Global Impact Fund, LLC (TGIF) is an impact-investing fund managed by California-based TriLinc Advisors, LLC (TriLinc). It was ranked 9th in the Global Banking and Finance Review’s top 100 impact companies in 2019. As of December 2018, its portfolio companies created over 18,500 jobs, achieved 100 per cent compliance with local environmental, labour, health, safety and business laws, standards and regulations, and all have committed to working towards implementing international environmental and health and safety best practices. Seventy-seven per cent of portfolio companies also demonstrated positive impact on their local communities through services or donations; and 91 per cent implemented environmentally sustainable practices (Figure 1).

Figure 1. The investment approach by TriLinc Global Impact Fund (TGIF)

We conducted extensive research on TriLinc, including multiple interviews with key members of the senior management team and exclusive access to a confidential dataset on some of its portfolio companies. Our research identified four critical factors for its success.

 

1. Veterans with track record in commercial investing and motivation for impact

After a long career on Wall Street, founder and CEO Gloria Nelund assembled an experienced team at TriLinc – who often described themselves as “reformed Wall Streeters”. The team are united by the vision that impact investing represents a realistic alternative only if it delivers financial return in line with or superior to traditional products. By building on their commercial experiences, they strive to align social and environmental motives with financial objectives.

 

2. Investment strategy engineered to maximise both return and impact

TriLinc’s strategy was engineered from the ground up to maximize both financial and impact objectives. The global impact fund focuses on short term financing to SMEs in selected emerging economies for their expansion projects. Most investments seek to generate employment growth and support local communities and sustainable growth that can be directly aligned with the business objectives. TGIF focuses on private, US dollar-denominated short-term notes such as trade finance or term loans. This allows the adoption of company-specific ESG targets based on IRIS* standard, and enhanced risk management through ad-hoc structuring and collateralisation. Short-term loans may be held to maturity, pragmatically addressing the fund’s liquidity requirements.

 

3. Local partner networks for opportunity identification and monitoring

TriLinc selects target countries using a proprietary macroeconomic analysis platform that takes into consideration a number of variables, including growth, stability and access. For each target country, TriLinc teams up with an institutional-class investment partner supporting through local knowledge and presence on the ground throughout the entire life cycle. No investment is made without a local partner. This approach is seen as an efficient and cost-effective way to build a global presence. TriLinc remains involved in all key decisions and activities.

 

4. Investment process attributing equal weighting to impact and financial considerations

All deals are appraised through an intertwined process assessing the merits from both financial and impact perspectives. A loan is only made when both sets of conditions are met. TriLinc has identified five core impact metrics, tracked by every investment across the portfolio on job creation, wage increase, increased revenue, profitability improvement and increased company taxes paid. Additionally, each portfolio company selects, and–through KPIs–is held accountable for, its own impact objectives. TriLinc can influence its portfolio companies through both “positives” and “proactive prevention of negatives”, using IRIS standard to track and report impact activities at both the fund and borrower levels.

* IRIS (Impact Reporting and Investment Standards) is an initiative of the Global Impact Investing Network (GIIN), a nonprofit organisation dedicated to increasing the scale and effectiveness of impact investing.


Notes:

  • Authors’ disclaimer: The authors do not receive any financial support, nor hold any financial interest in TriLinc and its associated companies or funds.
  • This blog post gives the views of its authors, not the position of LSE Business Review or the London School of Economics.
  • Featured image by Soneva Foundation, under a CC-BY-NC-2.0 licence
  • The statements and opinions expressed are those of the author and not necessarily those of TriLinc Global, LLC and its affiliates (collectively, “TriLinc”). It is meant for educational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy, or investment product.  Certain information contained herein regarding TriLinc is based on information provided or confirmed by TriLinc while other information has been obtained from third party sources and such information has not been independently verified by TriLinc. No representation, warranty, or undertaking, expressed or implied, is given to the accuracy or completeness of such information. Past performance is not indicative of future returns.

Feng Li is chair of information management at Cass Business School, City, University of London. His research investigates how digital technologies facilitate strategic innovation and organisational transformation in the digital economy. He has led a series of multi-million pounds (dollars) research programmes aimed at addressing grand societal challenges via financially sustainable and scalable approaches. He advises senior business leaders and policymakers on how to manage the transition to new technologies, new business models, and new organisational forms. He is a fellow of the British Academy of Management (FBAM) and the Academy of Social Sciences (FAcSS). E-mail: feng.li.1@city.ac.uk

 

Gianandrea Giochetta is a senior research fellow at Cass Business School, where he focuses on impact investing and socially responsible projects. He has over 20 years of experience in corporate strategy and international capital markets, both in mature and emerging economies. He previously worked for JPMorgan, McKinsey and Booz Allen & Hamilton.

 

Luigi Mosca is a research fellow at Imperial College London. His research interests lie at the intersection of organisation theory and strategy. He received his Ph.D. in economics and management from the University of Padova (Italy). Prior to joining Imperial, Luigi was a research fellow at Cass Business School.

Vulcan Capital Returns to TriLinc Global to Seed New Global Impact Offering

MANHATTAN BEACH, Calif. — (BUSINESS WIRE) — Vulcan Capital, the multi-billion dollar investment arm of Vulcan Inc. has again selected TriLinc Global Advisors, LLC (“TriLinc”) to seed the launch of its new TriLinc Global Sustainable Income Fund II, LLC (“TGSIF II”).

“Partnering with TriLinc to make investments in developing economies furthers Vulcan Capital’s mission,” said Chris Orndorff, Chief Investment Officer of Vulcan Capital. “This presents a unique opportunity for us to make a greater impact on lives and communities around the globe.”


“TriLinc could not be more pleased and honored to have Vulcan Capital partner with us again.”


“TriLinc could not be more pleased and honored to have Vulcan Capital partner with us again,” said Gloria Nelund, CEO of TriLinc Global, LLC (“TriLinc Global”). “Working together with Vulcan we can extend the impact of our investments in helping solve some of the critical global issues facing our world today.”

TGSIF II is a developing economy private debt fund focused on making private loans to private growth stage companies that are committed to responsible, sustainable management, and to the creation of positive measurable impact in their communities. “We are very pleased to continue to offer investors with what we believe to be lower risk access to private investment opportunities available in select-high growth economies including Latin America, Southeast Asia, Sub-Saharan Africa, and Emerging Europe,” commented Ms. Nelund.

 

About TriLinc Global, LLC
 

TriLinc Global is an impact investing fund sponsor with a mission to link market-rate returns, positive impact, and scalable solutions. Through its registered investment advisor subsidiaries, TriLinc Global has invested over $1 billion in private debt globally and seeks to demonstrate the power of the capital markets in helping solves some of the world’s pressing socioeconomic and environmental challenges. TriLinc Global funds provide growth-stage loans and trade finance to established and small and medium enterprises (“SMEs”) in select developing economies where access to affordable capital is limited. Borrower companies must demonstrate the ability to pay market rates, pass TriLinc Global’s environmental, social, and governance (ESG) screens, and commit to tracking and reporting on self-identified impact metrics. To learn more about TriLinc Global, please visit the TriLinc Global website at www.trilincglobal.com.

 

About Vulcan Capital
 

Vulcan Capital is the private investment arm of Vulcan Inc., the company founded by Paul G. Allen in 1986 to manage his business and philanthropic initiatives. Vulcan Capital is focused on generating long-term value appreciation across a multibillion dollar portfolio, which spans diverse industry sectors and investment asset classes, ranging from early-stage venture investments to public equity value investing, leveraged buyouts, acquisitions, and distressed situations.

 

Contacts
 

Robert Kronman – Director of Marketing
rkronman@trilincglobal.com 
(o) 424 200 6202
(c) 310 497 2116


DISCLAIMER

This information is for general purposes only and does not represent a recommendation or offer of any particular security, strategy, or investment. Amount invested represents current amount financed in term loans, trade finance, and short-term notes since 2013. There is no guarantee that TriLinc’s investment strategy will be successful or will avoid losses. Investment in a pooled investment vehicle involves significant risk including but not limited to: units are restricted; no secondary markets; limitation on liquidity; transfer and redemption of units’ distribution made may not come from income and if so will reduce the returns; are not guaranteed and are subject to board discretion. TriLinc Global is dependent upon its advisors and investment partners to select investments and conduct operations. TriLinc Global is not suitable for all investors. TriLinc Global, LLC (“TLG”) is a holding company and an impact fund sponsor founded in 2008. TriLinc Advisors, LLC (“TLA”) is a majority-owned subsidiary of TLG, and TriLinc Global Advisors, LLC (“TLGA”) is a wholly owned subsidiary of TLG. TLA and TLGA are SEC registered investment advisors. Securities offered through Frontier Securities LLC, Member FINRA/SIPC. Registration and memberships do not indicate a certain level of skill, training, or endorsement by the SEC, FINRA or SIPC.

 

 

TriLinc Global CIO: Trade War Underlines Need For Southeast Asia To Rely Less On China, United States

The following interview initially appeared on Emerging Market Views here.


 BRAI ODION-ESENE IN WASHINGTON, D.C.     |     JUNE 11, 2019

The stand-off over trade between China and the United States should serve as a wake-up call to export-reliant Southeast Asia nations about being less dependent on the world’s largest economies to power their economic growth, according to TriLinc Global’s Chief Investment Officer Paul Sanford.

TriLinc Global focuses on impact investing, extending private loans in the region of $5 million to $25 million to small- to medium-sized middle market ventures in industries that are, ideally, not directly impacted by political interference.

South-south trade (commerce with and amongst developing countries) has increased dramatically over the last ten to twenty years,” Sanford noted in an exclusive interview, so while the trade war between China and the United States matters in the aggregate, many of TriLinc Global’s borrowers are exporting to other emerging markets.

“What we’ve been more concerned about frankly is the (economic) slowdown in China,” he said, an occurrence that cannot be solely attributed to increased tariffs imposed by the US. “That is a more substantive risk that I’ve been watching for some time now,” Sanford added.

Many economists are coming around to the idea that China’s recent growth rate has been slower than official statistics indicate, and Sanford said he has held this view for a while – describing the world’s second-largest economy as “coming off the boil.”

What the tiff between China and the US has done is raise supply chain questions as it relates to Southeast Asia. “China hasn’t been the low-cost provider (in the region) for a while,” Sanford noted, overtaken by countries such as Cambodia, Laos, and Vietnam. Not only does this provide a bit of a cushion to global manufacturers, lowering concerns about a negative shock, the main question now is who will be the “winners and losers” from the China-US confrontation.

“It’s about being nimble and being aware of how that’s going to move,” he said, “I’m hopeful that the ASEAN group – which has just been like a club in name only, they don’t do anything – will finally start to realize they are stronger together than apart.”

The Association of Southeast Asian Nations is made up of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

While these countries have been content to tie their economic fortunes to both China’s rapid growth and demand from the US with these two economic behemoths now at odds with one another ASEAN countries need to start relying more on each other to fuel economic growth, Sanford said.

He described the custom duties imposed by ASEAN nations on imports from member countries as “absurd,” with most having more favorable bilateral trade agreements with the United States than each other.

As for Latin America, while the region benefits a lot from ‘south to south’ trade, it also regularly experiences a lot of volatility both economically – as high levels of US dollar-denominated debt have heightened their vulnerability to currency swings, and politically. The key to the region’s fortunes are tied to capital flows from the United States, Sanford said.

He noted that many investors do not like investing in other time zones, so Latin America both benefits and suffers from “hot money” originating from the US and usually in relative sizes that can move markets. “So they are constantly getting whipsawed,” he said.

This volatility and the political upheaval that usually follows is why TriLinc Global prefers to structure deals without any government involvement whatsoever – especially in Latin America. “Even if they are well-intentioned, they just create noise and drama,” Sanford said.

“LatAm is just the weakest of the regions, I think, because of all that volatility,” he said, referring to the regional economy as being “at the mercy” of US investors – with Argentina a case in point.

Emerging Europe, on the other hand, is more exposed and significantly impacted by capital inflows as well as outflows from Northern and Western Europe. Headline risk from geopolitical issues related to Russia serve to further complicate things, Sanford said.

However, the lack of access to capital for SMEs and lower-middle market companies “is so dramatic that there are so many opportunities,” he continued, irrespective of the headline risks.

In Sub-Saharan Africa, the key question in terms of the region’s prospects revolves around the trajectory of growth, Sanford said.

“Africa is in a really good place, our largest allocation is by far to Africa,” he said, “we have double the amount in Africa than any other region, so we are bullish on Africa.”

Looking below the surface, however, reveals a very divergent picture. Sanford described countries in Southern Africa as more stable but experiencing slower growth rates, while West African countries have the most opportunities but less political stability. While there is a lot of buzz around developments in East Africa, resulting in a lot of foreign interest, “I think the story has gotten ahead of what’s on the ground,” he cautioned, “it’s a little overpriced.”

As for North Africa, Sanford said countries in the region are still negatively tarred by geopolitical concerns in the eyes of investors. While some countries are unfairly lumped into this category, the risk is believed to outweigh the reward.

The Continental Free Trade Area (CFTA) is set to go into effect this summer after the agreement reached the threshold for required ratifications by the African Union’s member countries. It would create a single continental market for goods and services, encouraging cross-border investment flows, with the goal of eventually establishing a continent-wide customs Union and full economic integration.

“I am very cautiously optimistic,” Sanford said, especially in terms of the CFTA’s potential to fuel development to support increased intra-Africa trade, boost domestic manufacturing, and facilitate greater freedom of movement. “This free trade agreement is hopefully part of a greater Sub-Saharan African integration that will encompass trade … better infrastructure,” he said, “if that happens, it’s the single greatest thing that could happen to the continent.”


For questions or additional information, please email us at info@trilincglobal.com.

Private Equity vs. Private Debt Webinar Replay

On May 30, 2019, Gloria Nelund, Founder and CEO of TriLinc Global, and Paul Sanford, Chief Investment Officer, hosted an educational webinar – Private Equity vs. Private Debt.

The webinar covered several topics, including:

  • The Value of Private Assets
  • Private Equity vs. Private Debt
  • The Case for Emerging Markets
  • The Case for Private Assets in Emerging Markets
  • Tradeoffs between Private Equity and Private Debt

 

Click here to download a copy of the webinar deck.

Delivering Impact at Scale: An Interview with TriLinc Global’s Paul Sanford, Chief Investment Officer

The following interview initially appeared in the report titled Private Credit Solutions: A Closer Look at the Opportunity in Emerging Markets, published by the Emerging Markets Private Equity Association (“EMPEA”).

To download a full copy of the report, click here.


Why is the EM debt opportunity attractive to TriLinc and its investors?

TriLinc’s thesis is that the EM private debt opportunity is one of the most significant impact investment opportunities of our lifetimes. Therefore, our business strategy revolves around pairing impact investment opportunities with investment products and structures that are easily consumable and investable by large numbers and types of investors.

The investment opportunity stems from the supply-demand imbalance in financing for credit-worthy small and medium enterprises (SMEs) in emerging markets. IFC’s most recent estimate is that the financing gap for EM SMEs is as much as USD4.5 trillion. A supply-demand mismatch of that magnitude cannot help but be a compelling risk-adjusted investment opportunity that is inherently impactful from a developmental economics perspective.

TriLinc has been able to generate double-digit gross yields1 in its portfolios, with underwriting standards typical of cash-flow lenders but also with the over-collateralization typical of asset-backed lenders—the combination of which can significantly mitigate the risk of default loss.

We believe another attractive trait of the EM debt opportunity is that it easily lends itself to comprehensive diversification. The word ‘diversification’ is so often over-used that it frequently loses its meaning; yet it is systemically important to risk mitigation generally and to TriLinc’s EM private debt strategy specifically. We have been able to create pan-EM portfolios of private debt investments, across four different regions of the world—Latin America, Emerging Europe, Sub-Saharan Africa, and Emerging Asia—in over 30 carefully selected countries. The portfolio is further diversified by industry, investment type (i.e., term lending and trade financing), tenor (60 days to 60 months), and local market investment partners. This level of comprehensive diversification essentially allows TriLinc to create a quasi-index of private debt exposure designed to provide the return premium of idiosyncratic private companies while simultaneously diversifying out the tail risk. Finally, the strategy is non-correlated to public market securities.

 

How has TriLinc conveyed the value proposition of EM private debt to investors?

We begin with risk mitigation as being fundamental to the strategies we develop. For example, we have seen many opportunities that stretch for returns at the cost of weaker risk mitigation (e.g., subordinated, less collateral, and lighter covenants), but we have stayed committed to our view that most investors are seeking a predictable return over time rather than swinging for the fences with a higher risk of striking out.

Another example of this has to do with exits. One of the biggest complaints we have heard regarding private asset investing in emerging markets is the lack of exits. Because private debt is naturally self-liquidating, we remove that objection from consideration. Through 31 December 2018, TriLinc has had approximately USD668 million, or roughly 57%, of its loans go full cycle and pay off. This emphasis on risk mitigation and self-liquidation has allowed TriLinc to deliver a positive experience to its investors, which often leads to additional commitments, investor referrals, and long-term partnerships.

Next, we understand how investors invest, so we create investment vehicles that seek to match what they are used to investing in, and (importantly) give the investment professional recommending our strategy to their investment committees fewer idiosyncrasies that require explanation.

 

TriLinc operates a partnership model for accessing EM opportunities. How does this work in practice?

We strive to be very intentional about what will deliver the best results for our investors. A common refrain in investing is that the best investment decisions are often the ones to not proceed with certain investments. At TriLinc, decisions to avoid particular risks have been taken just as readily at the strategic level as at the individual investment level. We spent several years researching and analyzing the risks we believed were worth accepting versus the risks that were not.

Our investment partner model embodies this approach. We believe strongly that investors in any markets (let alone emerging markets) need to have a local presence and deep local market knowledge to consistently perform over time. There are only a couple of ways to achieve that—build it yourself over time or partner with local market specialists. After extensive research, we chose the latter. Our investment partner model provides local market access and knowledge, coupled with our dual underwriting and structuring, while meeting the exacting compliance standards of US-regulated investment firms. All of this work and intentionality has served TriLinc and its investors well over the last several years.

 

As you look ahead, what’s next for TriLinc and the EM debt opportunity?

We will keep doing what we are doing with our EM private debt strategy, while raising significant additional investor capital— there are still plenty of opportunities. We will continue driving our strategies and processes to seek the best of all worlds with attractive risk-adjusted returns and sustainability (ESG), while also driving positive impacts to the companies, communities, and economies in which we invest.


Disclaimer: TriLinc Global, LLC (“TriLinc”) is a holding company and an impact fund sponsor founded in 2008. This interview was provided for informational purposes only and does not represent a recommendation or offer of any particular security, strategy, or investment. There is no guarantee that TriLinc’s investment strategy will be successful. Prior performance is no guarantee of future performance. Investment in a pooled investment vehicle involves significant risk. TriLinc is dependent upon its advisors and investment partners to select investments and conduct operations.

1Past performance is not indicative of future results. No investor has actually received the returns discussed. Net returns are net of fees and expenses (management fees, incentive fees, and operating expenses).

The Global Economy’s Secret Engine: Middle Market Trade Finance

TriLinc is pleased to share with you our latest white paper: The Global Economy’s Secret Engine: Middle Market Trade Finance.

To download our whitepaper, please click here.


Abstract

Trade finance, defined as short-term financing to facilitate the movement of goods, is a $17.7 trillion industry, with world merchandise trade volumes historically growing around 1.5 times faster than world real gross domestic product (“GDP”).1 The industry offers large investment potential with an estimated $1.5 trillion funding gap,2 and trade finance exhibits attractive characteristics such as U.S. dollar-denominated transactions, non-correlation, strong collateralization, and extremely low default rates, along with other risk mitigants. Middle market companies, also known as Small and Medium Enterprises (“SMEs”), are vital players in the sector, accounting for 40 percent of exports from Organisation for Economic Co-operation and Development (OECD) countries, and a somewhat smaller share in developing countries worldwide.3 The trade finance gap affects SMEs disproportionately,4 which creates potential for attractive risk-adjusted returns from trade financing to SMEs in select high-growth economies with stable political environments and reliable legal systems.

 

1World Trade Organization. World Trade Statistical Review, 2018. 2Asian Development Bank. ADB. 3OECD, http://www.oecd.org/std/its/trade-by-enterprise-characteristics.htm 4World Trade Organization”. Trade Finance and SMEs, 2016.

Why Trade Finance? Webinar Replay

On March 28, 2019, Gloria Nelund, Founder and CEO of TriLinc Global, and Paul Sanford, Chief Investment Officer, hosted an educational webinar – Why Trade Finance?

The webinar covered topics including:

  • Why Trade Finance is the Lifeblood of the World Economy
  • The Importance of SMEs in Trade Finance
  • Why access to affordable capital is constrained in developing economies
  • The favorable characteristics of Trade Finance
  • Opportunities and Impact of Trade Finance


Click here
to download a copy of the webinar deck.

TriLinc Global Ranks in Top 10 of Inaugural ‘100 Top Impact Companies’ of 2019

Published: Apr 25, 2019 1:28 p.m. ET

MANHATTAN BEACH, Calif.–(BUSINESS WIRE)–TriLinc Global, LLC (“TriLinc”) has been selected as one of the “Real Leaders Top 100 Impact Companies” of 2019.


This list, in its inaugural year, was developed in collaboration by Real Leaders, Big Path Capital, B Lab, Bain Capital, KPMG, and Mintz Levin to show that business can thrive as a force for good and rank the positive impact of companies that are leveraging the engine of capitalism for the greater good. TriLinc ranked 9th out of the 100 companies listed. Applicants were evaluated based on social and environmental impact and ranked using The B Lab assessment metrics as well as growth rate and scale. Applicants were required to provide verification of growth and practices.

 

“We are very honored to be included on this list and to be recognized for our mission to harness the power of the capital markets in helping to solve global challenges facing our society,” said Gloria Nelund, CEO of TriLinc. “TriLinc is excited to be working alongside impact industry peers to move impact investing further into the mainstream,” stated Gloria.

 

TriLinc, through its registered investment advisers, pursues an impact investing strategy that provides growth-stage loans and trade finance to established small and medium enterprises (“SMEs”) in developing economies where access to affordable capital is significantly limited. Impact investing is defined as investing with the specific objective of achieving a competitive financial return as well as creating positive, measurable impact in communities across the globe.


DISCLAIMER

The REAL LEADERS 100 List was created using the ranking formula of Revenue x Growth Rate x B Impact Assessment = Force for Good. The B Impact Assessment metric was chosen as an industry third-party assessment tool as B Lab oversees the B corp certification process. Growth rate represents economic growth. TriLinc submitted an application for consideration for ranking which did not include any fees or payments. TriLinc’s receipt of this recognition is in no way indicative of any individual client or investor’s experience with TriLinc, TLA, or TLGA, or of past or future investment performance.

This information is for general purposes only and does not represent a recommendation or offer of any particular security, strategy, or investment. There is no guarantee that TriLinc’s investment strategy will be successful or will avoid losses. Investment in a pooled investment vehicle involves significant risk including but not limited to: units are restricted; no secondary markets; limitation on liquidity; transfer and redemption of units’ distribution made may not come from income and if so will reduce the returns; are not guaranteed and are subject to board discretion. TriLinc is dependent upon its advisors and investment partners to select investments and conduct operations. TriLinc is not suitable for all investors. TriLinc Global LLC (“TLG”) is a holding company and an impact fund sponsor founded in 2008. TriLinc Advisors, LLC (“TLA”) is a majority-owned subsidiary of TLG and TriLinc Global Advisors LLC. (“TLGA”) is a wholly-owned subsidiary of TLG. TLA and TLGA are SEC registered investment advisors. Securities offered through Frontier Securities LLC, Member FINRA/SIPC. Registration and memberships do not indicate a certain level of skill, training or endorsement by the SEC, FINRA or SIPC.

 

CONTACTS

TriLinc Global, LLC
Robert Kronman, Director of Marketing
(o) 424 200 6202
(c) 310 497 2117
rkronman@trilincglobal.com