US-Based Young India Fund Launched to Capitalize on $105 Billion Trade Finance Gap in India
MIAMI, Sept. 20, 2018 /PRNewswire/ -- Young India Fund ("YIF") is a trade finance fund launched to provide investors with opportunities in the India-trade finance market. Based in Miami, the fund's strategy provides dollar-denominated, short-term, collateralized and self-liquidating loans to Indian exporters and importers. The strategy is executed through three product types: accounts receivable financing, supply-chain financing, and inventory buybacks.
As an asset class, trade finance offers attractive characteristics. According to International Chamber of Commerce, trade finance has industry-wide low default rates, high liquidity, low volatility, low correlation to other asset classes, and high risk-adjusted returns.
In recent years, due to tighter regulations and other reforms, banks in India have reduced their lending to businesses. According to the Asian Development Bank, India accounts for the largest unmet demand for trade finance loans, estimated to be over $105 billion. "Given the lack of bank financing, the demand for alternative sources of lending is increasing in India. Our fund is well positioned to fill the gap," said Michael Corcelli, CEO of YIF.
India is the fastest growing major economy with a GDP growth rate of 8.2% during the quarter ended June 30, 2018 and has the world's largest youth population. The Indian economy is on track to report record high exports levels in 2018. "These macro trends support a very favorable lending environment in India," said Ritesh Shaw, COO of YIF.
Young India Fund's general partners are Tradepay - an India-based trade finance house and Alexander Alternative Capital, a privately held alternative investment management firm. With a combined 80+ years of experience in trade finance, credit underwriting and investment management, the management team has a diverse background and distinct knowledge of the Asia-Pacific region.
"We aim to manage a diversified portfolio of short-duration loans with expected loan to value ratios of 70-90%. Furthermore, we expect to achieve low volatility and are targeting risk-adjusted net returns of 10-14%," states Sahil Sethi, the fund's Portfolio Manager.
Given that investors have had very limited opportunities to participate in this asset class, Young India Fund will provide one of the first India-based trade finance strategies for investors. The time is now for one of the oldest forms of credit, trade finance, to warrant an exposure in investor's portfolio.
ABOUT TRADEPAY:
Tradepay is a trade finance house that provides dollar-denominated short-term loans to exporters and importers in India. Tradepay has an on-ground team of professionals running the operations with 0% defaults historically and has returned approximately 18-24% annually. Since 2016, Tradepay has financed approximately $60 million in loans.
ABOUT ALEXANDER ALTERNATIVE CAPITAL:
Alexander Alternative Capital ("AAC") is a privately held alternative investment management firm with over 15 years of credit and trade finance experience. AAC uses a global macro strategy to invest across asset classes including CDO, CLO, and derivatives. AAC is an early stage factoring investor and purchased the world's first electronically traded invoice.
To learn more, please visit our website www.youngindiafund.com or contact Michael Corcelli below:
Michael Corcelli
(786) 574-5165
DISCLAIMER
Under no circumstances should any information presented in this statement be construed as an offer to sell, or solicitation of an offer to purchase any securities or other investments. The statement does not contain the information that an investor should consider or evaluate to make a potential investment. Other materials related to investments in entities managed by Young India Fund are not available to the general public.
SOURCE Alexander Alternative Capital GP, LLC
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