Ninepoint Trade Finance Fund
Why Invest in Ninepoint Trade Finance Fund
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Short Duration Receivables – Diversified portfolio of accounts receivable factoring, supply chain (inventory) and purchase order financing accounts to U.S. SMEs with terms ranging from 30-120 days.
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Fully Collateralized and Insured – Fully secured by accounts receivables and inventory with factoring accounts 100% insured and supply chain (inventory) & purchase order accounts 90% insured.^
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Senior Secured – Security interests are primarily 1st lien against eligible receivables, inventory and/or purchase orders.
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Established National Infrastructure – Partnered with multiple originators that have focuses on specific regions across the U.S.
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5 Reasons to Consider Trade Finance Fund
1. The Growing Opportunity
There are around 29 million small and medium-sized enterprise (SME) in the U.S. In response to regulations requiring increased capital requirements, banks have pulled back from the trade finance market, leaving the SME market underserved.
2. Trade Finance As An Investment
For SMEs, investment firms that participate in trade finance, like Highmore Group Advisors, can be better providers of funding than banks because they are:
- Willing to finance smaller amounts
- Efficient in response time and execution
Trade Finance can provide both an efficient and valuable source of working capital to the growing SME market.
3. Greater Liquidity
Short terms on trade and receivables financing, typically ranging from 30-120 days, provides investors with a way to access to private debt without the long lock-up periods found in some private debt products with longer underlying loans.
4. Capital Protection
- Highmore provides multiple layers of credit underwriting and oversight at originator,
manager and insurance level - Senior-secured, highly collateralized asset-based loans to mid-market firms.
- Credit Insurance on:*
- Supplier Purchase: Credit protection on 90% of capital outlay and accrued fees
(interest) - Factoring: Credit protection on 100% of principal. Insurance companies insure 90%
of invoices and therefore up to 90% of the face value
- Supplier Purchase: Credit protection on 90% of capital outlay and accrued fees
* Insurance is provided on individual factoring accounts and supply chain purchases. Insurance providers include Allied World, Euler Hermes and Tokio Marine. Credit protection on 90% of capital outlay and accrued fees (interest) on supplier chain finance. Credit protection on 100% of principal on factoring accounts as insurance companies insure 90% of invoices and therefore up to 90% of the face value of invoices are funded.
5. Added Oversight
Private debt is a loan-by-loan business. Ninepoint supplements fund-level oversight with an in-house Due Diligence & Oversight Team that has over 15 years of experience in corporate lending and loan origination.
Supporting our Oversight Team is BlackRock’s Aladdin platform, which provides additional risk management tools for the Oversight Team.
- Outcome for borrowing company:
Better repayment terms and buying power than they could achieve on their own. - Outcome for investor:
Accrued fees contribute to yield in the fund.
- Outcome for borrowing company:
Quicker conversion of A/R to cash to fund operations and growth. - Outcome for investor:
Margin between full invoice and discount Highmore paid for A/R contributes to yield in the fund.
Investment Team
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Regulatory Documents
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Fund Codes
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Fund Details
Fund Type Open-ended unincorporated investment trust Inception Date May 31, 2019 Registered Tax Plan Status Eligible Management Fee Series F: 0.10%
All Classes are charged a 1.55% advisory fee at Master Fund LevelPerformance Fee†† 20% over 7% Preferred††† Minimum Initial Investment $10,000 accredited
$150,000 non-accredited*Minimum Subsequent Investment $5,000 Minimum Investment Term None Redemptions Monthly, with 90 days notice† Valuations Monthly
* $150,000 for non-individual.
† If during any redemption period, the Manager has received from one or more Unitholders an acceptable Redemption Notice to redeem in aggregate 3% or more of the outstanding Units, the Manager may, in its discretion, choose to meet such redemptions on a pro rata basis effective as of such quarter-end and to meet such excess redemptions on a pro rata basis effective as of subsequent quarter-ends, subject to the application of the 3% limitation for each such subsequent quarter-end.
†† The Fund may invest up to 25% of the total assets in any one issuer at any time prior to the one-year anniversary for the initial closing of the Fund.
†††Fund returns between 7% and 8.75% are payable to the General Partner as a Performance Allocation plus applicable taxes. In addition. 20% of returns in excess of 8.75% are payable to the General Partner as a Performance Allocation.
^Insurance is provided on individual factoring accounts and supply chain purchases. Credit protection on 90% of capital outlay and accrued fees (interest) on supplier chain finance. Credit protection on 100% of principal on factoring accounts as insurance companies insure 90% of invoices and therefore up to 90% of the face value of invoices are funded.
Are You An Accredited Investor?
The minimum subscription amount is $150,000.00 in all jurisdictions, unless you meet the definition of "accredited investor" under National Instrument 45-106 Prospectus and Registration Exemptions.
If you meet the definition "accredited investor" (see below), you may invest a minimum of $25,000. Please consult the Offering Memorandum to determine your qualification status. Investment Advisors should consult their company's internal policies.
The Subscriber, or one or more beneficial purchasers for whom the Subscriber is acting, is (i) a resident of, or the purchase and sale of securities to the Subscriber is otherwise subject to the securities legislation of one of the following: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, North West Territories, or Nunavut, and the Subscriber is (and will at the time of acceptance of the Subscription be) an accredited investor within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions ("NI 45-106") because the Subscriber is one of the following:
| (a) | a Canadian financial institution, or a Schedule III bank; |
| (b) | the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); |
| (c) | a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; |
| (d) | a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); |
| (e) | an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d); |
| (f) | the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada; |
| (g) | a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l'île de Montréal or an intermunicipal management board in Québec; |
| (h) | any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government; |
| (i) | a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada; |
| (j) | an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000; |
| (k) | an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; (Note: If individual accredited investors wish to purchase through wholly-owned holding companies or similar entities, such purchasing entities must qualify under section (t) below, which must be initialled.) |
| (l) | an individual who, either alone or with a spouse, has net assets of at least $5,000,000; |
| (m) | a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements; |
| (n) | an investment fund that distributes or has distributed its securities only to:
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| (o) | an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt; |
| (p) | a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; |
| (q) | a person acting on behalf of a fully managed account managed by that person, if that person:
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| (r) | a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; |
| (s) | an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function; |
| (t) | a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors; |
| (u) | an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser, or; |
| (v) | a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor. |
Toronto, Ontario M5J 2J1 Canada
Advisor Use Only
This commentary is for Advisor use only. If you are an Advisor, please contact your Ninepoint Product Specialist for access.