Kimura
Capital

Trade Finance AU Fund: Institutional Class

May 2021

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Strategy
Overview

Kimura Capital LLP is a UK-based, FCA-registered investment advisor focused on commodity trade financing. The firm was founded in 2013 by Kristofer Tremaine and Neil West and along with the other senior members of the team bring extensive experience to the effort, many having built or run commodity trading and financing businesses previously. The Kimura Commodity Trade Finance Fund is a private credit strategy focused on financing the physical supply chain of commodities worldwide. European banks had long dominated this space, but changes to capital regulations have forced many institutions out of this business, leading to a significant “lending gap” for commodities. Through the Fund, Kimura provides much needed capital to producers and consumers of commodities through asset-backed loans, collateralized by physical commodities and often insured by third parties. Loans have terms of 30 to 180 days and are diversified across commodity types (ie, Ags, Softs, Metals and Energy), trade routes, and borrowers. The repeatable nature of these financings yields consistent returns that exhibit low correlation to credit spreads and interest rates.

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Performance Details

Net Return Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD ITD
2021 0.01% -0.15% 0.21% 0.19% 0.15% 0.43% 3.65%
2021 0.17% 0.48% 0.46% 0.18% 0.94% 0.42% 0.41% 0.13% 3.18% 3.18%*

May
Commentary

Returns were subdued in May, due to ongoing delays to shipping, repayments and associated insurance claims. We see stronger than ever borrowing demand from medium to large companies, resulting in timely completion of several negotiations with new and existing borrowers, at attractive risk premiums. The May commodity price rally has helped, putting upward pressure on facility limits at banks, who were not positioned to respond to the increase in demand. The expanding presence of Kimura in the trade finance space, has also encouraged a previously untapped pool of larger commodity players to approach us. We added a new facility to the portfolio, in collaboration with one of the world’s leading providers of agricultural commodities, logistics and financial services, to finance their Coffee supply operations in NW Europe. We continue to progress and execute pipeline transactions, which offer further diversification and opportunities for attractive spreads for the fund, across strategic commodity assets.

Portfolio by
Commodity
Type

Disclaimer

Kimura Capital LLP is a Corporate Authorised Representative (CAR) of Boutique Capital Pty Ltd AFSL 508011, CAR Number 001284820 (BCPL).

This document contains general advice only and has been prepared by Kimura Capital LLP for individuals identified as wholesale investors for the purposes of providing a financial product or financial service, under Section 761G or Section 761GA of the Corporations Act 2001 (Cth).

This factsheet may not be relied or acted upon by any other person. Past returns are not indicative of future performance. Past performance is no guarantee of future results.

The information herein is presented in summary form. and is therefore, subject to qualification and further explanation. The information in this document is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking into account personal investment objectives, financial circumstances or particular needs. Recipients of this document are advised to consult their own professional advisers about legal, tax, financial or other matters relevant to the suitability of this investment service.

The investment summarised in this document is subject to known and unknown risks, some of which are beyond the control of Kimura Capital LLP and their directors, employees, advisers or agents. Kimura Capital LLP does not guarantee any particular rate of return or the performance of the Fund, nor does Kimura Capital LLP and its directors personally guarantee the repayment of capital or any particular tax treatment.

The materials contained in this presentation represent a general summary of Kimura Capital’s current approach to portfolio construction. Kimura Capital LLP is not constrained with respect to any investment decision making methodologies or percentage limitations, ranges or guidelines, and may vary from them materially at its sole discretion and without prior notice to investors. over time, markets change and Kimura Capital LLP will seek to capitalise on attractive opportunities wherever they may be. Depending on conditions and trends in markets and the economy in general, Kimura Capital LLP may pursue other objectives or employ other strategies or techniques considered appropriate and in the best interest of portfolio performance.

There are some risks involved in relation to investing in the strategy. Understanding and managing risk is fundamental to any successful investment policy. All investments carry some level of risk, and there is typically a direct relationship between risk and return. Generally, the greater the risk, the greater the potential return and the lower the risk, the lower the potential return over the long term. Also, the higher the degree of risk an investment carries, the more its price may fluctuate. We describe what steps we take to mitigate risk (where possible) in the Fund’s Information Memorandum. It is important to note that despite taking such steps, we cannot mitigate risk completely.

This report was prepared as a private communication to clients and is not intended for public circulation or publication or for the use of any third party, without the approval of Kimura Capital LLP. Whilst this report is based on information from sources which Kimura Capital LLP considers reliable, its accuracy and completeness cannot be guaranteed. Data is no necessarily audited or independently verified. Any opinions reflect Kimura Capital’s judgement at this date and are subject to change. Kimura Capital LLP has no obligation to provide revised assessments in the event of changed circumstances. To the extent permitted by law, of Boutique Capital Pty Ltd, Kimura Capital LLP and their directors and employees do not accept any liability for the results of any actions taken or not taken on the basis of information in this report, or for any negligent misstatements, errors or omissions. This Document is for informational purposes only and is not a solicitation for units in the Fund. Application for units in the Fund can only be made via the Fund’s Information Memorandum and Application Form. All information provided herein is qualified in its entirety by reference to such documentation