Nicolas Clavel is the founder and chief investment officer of
Scipion Capital, which provides secured lending via short-term self-liquidating loans to finance the delivery, production, and/or processing of non-perishable commodities as export, import, or within Africa. Physical control of the goods being financed is secured via a pledge agreement.
He oversees the investment processes for all of the firm’s strategies and is responsible for the development of all new products. In addition, he sits on Scipion Capital’s Investment Committee.
Nicolas has over three decades of experience in trade finance and in this podcast elaborates on the commodity trade finance opportunities in Africa, the hurdles and their ability to deliver consistent risk-adjusted returns.
Listen to the complete feature Commodity Trade Finance: Uncovering the Opportunities in Africa
Or listen to selected sub-features
Trade financing is often adhered to as “merchant banking in a hedge fund garb”.
So Nic, could you talk us through your fund’s strategy?
In terms of portfolio allocation - how many such trade positions/allocations do you have on average?
Also, given that African countries often grab headlines for amongst others: political, social, military upheaval; why have you chosen to focus on investment opportunities in Africa?
In which African states do you have a presence?
Where do you see the opportunities - geographically and on a sector and value-added basis?
Could you share some other trade examples beyond the metals and mining sectors?
How does infrastructure, or rather the lack of it, pose a challenge?
How do you source your trades?
How do you determine the rate of interest on a loan being made?
How do you ensure that the rate set is realistic-payable, without causing the loan taker to default, whilst it is still a profitable proposition for the fund?
How do you manage and mitigate the different risks associated with running such a strategy? In particular valuation, default, fraud, legal, political, corruption, currency …
How do you manage and mitigate fraud related risk?