The first vintage offers a personalized solution for investing in trade finance through unique access to its ITRN (Insured Trade Receivable Notes) strategy. This “club deal” was specifically designed for a group of leading investors in France, but the strategy will be available to interested investors later this year.
Unlike traditional trade finance investment decisions, the strategy developed by NN IP is implemented through a general securitization fund. Its multi-currency portfolio, equipped with a new specially designed risk hedging mechanism, does not require a deposit, which significantly expands the range of funding sources, but is particularly effective in terms of profitability. The atypical risk, profitability and liquidity profile of this solution makes it a unique investment proposal in the alternative credit market.
The vehicle invests in short-term bonds linked to diversified and highly detailed debt portfolios created around the world. Each security is fully backed by a financial institution with an A- (or higher) rating. The fund aims at an effective maturity of one year and aims to obtain an average gross return of Euribor + 2-3% per year in the medium term.
Niels Bodenheim, Head of Alternative Lending, NN Investment Partners: “In the field of alternative credit, it usually takes 2-3 years to raise capital, and then another 4-5 years to deploy it. This personalized solution allows investors to combat the risk of concentration through a variety of powers, as well as without delay to deploy capital. This means that investors are potentially able to make a profit faster. In addition, this innovative structure of the “club agreement” allows NN IP to offer this type of asset class to a wider range of investors. »
This innovative approach proves that the club agreement format, which is mainly used in the context of real estate investment, can also be applied to other alternative asset classes to meet the high demand from pension funds, insurers and institutional investors. NN IP decided to focus on trade finance for the first version of this fund, given its strong experience in this field. However, this approach could be extended to other alternative asset classes. The Club Agreement is a tool that is ideal for the strategy of financing insured trade. In addition, it is a vehicle well known to French investors and regulated by the rules.
Suresh Hegde, Head of Structured Private Debt at NN IP: “We are proud to have launched this new investment solution based on our recognized experience in trade finance. This asset class offers investors many attractive characteristics, including low correlation with market volatility, short duration, limited risk, and potentially good returns. Investors can help finance the global real economy through this channel, and there are many opportunities to link investment to sustainability goals. The “multi-currency” format of the club agreement is the first for NN IP, as well as for prestigious insurance companies that have decided to join it, and we are convinced that this is a very promising approach that will be relevant to many others. investors and asset classes. »
Philippe Fidar, CEO of NN Investment Partners in France: “This club agreement is a real step for NN IP, especially in France, as it is a specially designed strategy that meets the strong demand for alternative assets from pension funds, insurers and other institutional investors. »
The first invention of this “club agreement” was developed for institutional investors in France and brings together a total of 8 leading French insurers with initial commitments of 258 million euros. Other international institutional investors will be able to take part in the second harvest at the end of 2022.