Galena Asset Management completes first funding for innovative USD155 million Committed Prepayment Portfolio Fund
Galena Asset Management, a wholly-owned investment subsidiary of Trafigura (“Trafigura” or the “Group”), one of the world’s leading independent commodity trading companies, has successfully completed the first funding within a USD155 million, closed-ended three-year Committed Prepayment Portfolio Fund. The Galena Commodity Credit Fund (the “Galena Fund”), a first of its kind in the commodities industry, was raised with private equity and senior debt provided by a syndicate of core banks for the Group - Lloyds Bank, Sumitomo Mitsui Banking Corporation ("SMBC") and SuMi TRUST Bank.
Prepayments are used to organise up-front loans for commodity producing counterparties and are repaid over time in commodity shipments. Trafigura has become one of the leading companies engaged in structured trade finance, with total prepayments for commodities including oil, metals and minerals now exceeding USD5 billion per annum.
The Galena Fund is managed independently from Trafigura and has been established to purchase insured prepayments from Trafigura, thus increasing Trafigura’s ability to agree further prepayments with producing counterparties.
“Our Singapore-based team has structured an innovative finance vehicle that introduces commodity linked prepayments as a new asset class for investors,” said Maximilian Tomei, Chief Executive Officer for Galena Asset Management. “Our intention is to create a series of similar funds at a time when the business environment is rapidly evolving for the commodity trading industry.”
“Product innovation is key for Singapore as a financial hub and we are proud to have supported the first structure of its kind in the fund management and commodities industries,” said Chin Hwee Tan, CEO Asia Pacific for Trafigura and Monetary Authority of Singapore Financial Centre Advisory Panel Committee Member.
Trafigura has set out to explain how resource-backed loans work, for example, through the publication of ‘Prepayments Demystified’ in 2020. In accordance with its commitment to the Extractive Industries Transparency Initiative (EITI), Trafigura discloses prepayments made by its majority-owned companies, including funds managed by Galena Asset Management, to state-owned entities through its annual Payments to Governments report here.
In addition to being Lenders, Lloyds Bank, SMBC and SuMi TRUST Bank acted as Mandated Lead Arrangers and SMBC also acted as Agent, Security Agent and Account Bank.
Trafigura Press Office: +41 (0) 22 592 4528 or firstname.lastname@example.org
About Galena Asset Management
Galena Asset Management is the wholly-owned investment arm of the Trafigura Group. Galena Asset Management S.A. is authorized and regulated by the Swiss Financial Market Supervisory Authority (FINMA) and Galena Asset Management (Asia) Pte. Ltd. is a Registered Fund Management Company, registered with the Monetary Authority of Singapore. For more than a decade Galena has operated at the intersection of financial and physical commodity markets, enabling leading institutional investors to access investment opportunities alongside the Trafigura Group through funds or managed accounts. Galena’s portfolio management specialists have built considerable experience in metals, minerals, oil, shipping and infrastructure. Galena acts independently, but derives significant benefits from its relationship with Trafigura, its principal anchor investor.
Founded in 1993, Trafigura is one of the largest physical commodities trading groups in the world. Trafigura sources, stores, transports and delivers a range of raw materials (including oil and refined products and metals and minerals) to clients around the world and has recently established a power and renewables trading division.
The trading business is supported by industrial and financial assets, including a majority ownership of global zinc and lead producer Nyrstar which has mining, smelting and other operations located in Europe, Americas and Australia; a significant shareholding in global oil products storage and distribution company Puma Energy; global terminals, warehousing and logistics operator Impala Terminals; Trafigura's Mining Group; and Galena Asset Management.
With circa 850 shareholders, Trafigura is owned by its employees. Over 8,500 employees work in 48 countries around the world. Trafigura has achieved substantial growth over recent years, growing revenue from USD12 billion in 2003 to USD147 billion in 2020. The Group has been connecting its customers to the global economy for more than two decades, growing prosperity by advancing trade.