Investment opportunities

The Opportunity

Scipion Capital offers Private Debt solutions to enterprises operating in Africa and selected other emerging markets.

The group was established in 2007 to fill the credit gap created after the introduction of Basel II & III caused banks to withdraw from lending in emerging markets. It seeks long-term capital appreciation by investing in un-correlated low volatility Private Debt opportunities.

The senior team has more than 150 years of cumulative experience in banking, corporate finance, project finance, metals and mining, M&A, equities impact investing, and portfolio management in emerging markets.

Scipion’s in-house team includes investment, operational and legal experts based across key trading centres in London and Geneva, as well as strategic on-the-ground locations across Africa. The firm offers borrowers a suite of corporate finance solutions.

Financing solutions provided by Scipion include:

  • Commodity Trade Finance
  • Receivables Financing & Forfaiting
  • Asset Backed Finance (1-5 years)
  • Trade Participations (co-investing and syndications)
  • Environmental, Social & Impact Investing
  • Capital Raising and Advisory Services

The Asset Class

The Private Debt industry identified the credit gap and assets under management in this asset class have quadrupled since 2006, reaching USD 638 billion at year-end 2017 and are estimated to reach USD 1 trillion by 2020.

This rate of Private Debt growth has not been seen since the hedge fund boom of the 1990s. As the attraction of un-correlated returns grows, new investors enter the asset class and veterans continue to increase relative allocations, Private Debt looks set for further records in the coming years.

Private Debt Asset Class AUM (USD Billions)

 

Source: 2018 Preqin Global Private Debt Report

The Growth Story

Concurring with GDP and FDI trends, global trade in non-fuel commodities with Africa also has increased. Total trade with key partners has risen by more than 100% in 2016 compared to 2000.

Trade flow and volume have changed and increased dramatically. China overtook the US to become Africa’s largest bilateral trading partner in 2009 with total bilateral trade of approximately USD 150 billion in 2016. The Chinese Government has stated its intention to increase bilateral trade to over USD 400 billion by 2020.

The EU and U.S. remain key markets for Africa’s non-fuel commodities trade. With a recovery expected to take hold in both regions over 2018,  demand for commodities is expected to remain high.

Africa Commodity Trade with Key Markets (USD Billions)1

 


¹Source: UNCTAD unctadstat.unctad.org

Trade Finance in Africa since August 2007

Scipion African Opportunities Fund SPC (“SAOF”) was established in 2007 to fill the lending gap in commodity trade finance.

The Fund participates in self-liquidating short-term loans, financing the delivery, production and processing of non-perishable commodities. It employs a dynamic, value-orientated approach to invest in opportunities across a variety of sectors and countries within Africa to exploit the optimum risk-reward.

The Fund uses third party co-investment to strategically maintain high portfolio diversification while retaining exposure and access to larger investments and borrowers.

Model Portfolio

For illustration purposes only, model not necessarily representative of the portfolio held by the Flagship Fund at any given time

For illustration purposes only, model not necessarily representative of the portfolio held by the Flagship Fund at any given time

Environmental, Social and Impact Investing

Scipion Impact Fund was established in 2018 and reflects the senior management team’s commitment to responsible investing.

The Fund’s investment decisions meet additional Environmental, Social and Impact criteria, including commodity, country and impact requirements that satisfy a narrower definition of social impact investing.

The Environmental, Social and Impact investment criteria were designed with the help of a group of experts, independent social impact investors and other partners. The criteria are reviewed to maintain best practice in a complex and changing investment landscape.

Medium-Term Private Debt

Scipion Term Loan Fund was established in 2017 to address the withdrawal of banks from the asset backed loan market in emerging markets.

The Fund participates in private, 1-5 year loans financing physical assets generating US Dollar revenue streams. It employs an opportunistic approach to make targeted investments in areas yielding the best risk-reward returns.

The Fund benefits from strong origination, structuring and management synergies, and works with similar types of borrowers as the Flagship Fund.

Scipion Active Trading Fund

Scipion Active Trading Fund (“SATF”) was set up in 2010 as a lending platform to facilitate the fair allocation of different investments between Sub-Participants, Co-Investors  and Funds managed by Scipion Capital Ltd:

  • SATF is the lender of record.
  • All security, including pledges, charges, assignments and guarantees, is made by borrowers and obligors in favour of SATF.
  • All payments to and from borrowers are made and received at an SATF bank account.

There are opportunities for suitably qualified third party investors to co-invest alongside Scipion African Opportunities Fund into loans made by SATF.