Please see the important information and disclaimer before reading any of this material. This material provides information on the investment process used for the Eiger Trade Finance Fund. It describes the investment rationale and an overview of the methodologies that are employed in order to fulfil the investment strategies as laid out in the Offering Memorandum of the Eiger Trade Finance Fund. The fund is managed and advised by Eiger Trading Advisors Limited, a UK FSA regulated investment management and advisory firm. The information provided here is concerning the Eiger Trade Finance Fund.
The primary objective of the Eiger Trade Finance Fund (“the Fund”) is to provide a Sharia’a compliant liquidity management tool to Asset Managers, Bank Treasurers, and Investment Companies that provides a return in excess of that achievable in the interbank deposit market. This objective is achieved through the execution of trade finance based investments in physical and raw commodity markets, principally in industrial metals and their ores such as aluminium, copper, lead, nickel, steel and zinc as well as in soft commodities, such as coffee, cocoa, sugar and cotton under Sharia'a compliant terms and specifically to execute physical commodity backed transactions that comply and meet with Sharia'a terms and conditions. Eiger Trading Advisors has the expertise to engage in a wide range of cash and forward sale and purchase strategies in the physical commodity markets.
The objective is to create a fund, which is based on a portfolio of Sharia’a Compliant Trade and Inventory Financing receipts. The fund will gain exposure to commodities via inventory financing, as well as physical exposure through individual commodity value chains. The fund will have a very large capacity, being focused on the 1.2T USD per annum Trade Finance market which is expanding at 6% per annum, according to WTO data. Trade Finance activity will have a focus towards developing trade in IOC countries.
A key priority of the Fund is to provide trade finance and to promote trade flows around the world for an agreed list of commodities and products that meet with the Fund’s established investment criteria.
The fund is advised and managed by Eiger Trading Advisors Ltd, a UK FSA regulated investment management and advisory firm. The targeted return is LIBOR 2.5 - 3.5 % with a targeted volatility of 1%
Commodities such as aluminium, copper, steel, coffee, cocoa and sugar, can offer excellent opportunities to an Islamic investor with our systematic approach. Investment opportunities can be found in a wide variety of origins and terminal markets around the world which can generate excellent risk adjusted returns. The Eiger team, through its long experience and in-depth knowledge of these diverse origins and heterogeneous global commodity markets is in an excellent position to identify and act upon these specific investment opportunities. For the Eiger Trade Finance Fund the core strategy is to build a risk weighted series of integrated supply chains, which we call “pipelines” in various commodity sectors in which we have genuine expertise and to control the critical stages of the supply process
Islamic Financing Contracts
The Fund takes positions in a number of different markets using a variety of Islamic Financing products. For example, a Salam contact provides the means that an advance payment may be made against goods which are to be delivered at a later date. In the context of the Eiger Trade Finance Fund, this means that the price of an agricultural crop such as coffee, cocoa or sugar is paid via a Salam form of sales contract whereby the Fund manager, acting on behalf of its investors, provides cash liquidity to a counterparty against future production. Thus Salam gives the opportunity to the Fund’s counterparties to produce, store and transport a range of agricultural crops of fixed specifications by entering into standard Salam contracts with the Fund under which the Fund buys from the producers the commodity at a price paid in advance provided that the two parties agree on appropriate means for the marketing of such products. Agricultural commodities in particular can offer excellent opportunities to the investor who uses a coherent and systematic approach to investing in this manner. Interms of Trade Finance, the utilization of Islamic LC's is a key part of the Funds investment amoury.
Our core strategy within this fund is to build integrated supply chains – “pipelines” – in commodity sectors in which we have genuine expertise and to control the critical stages of the supply process. This activity creates value through origination from low-cost production markets and we then add value and therefore capture margin, at each subsequent step of the supply chain process.
The first step is to ensure that we can capture value by sourcing from low cost markets.
Distribution To High Demand Markets
The Eiger Green Commodity Fund looks to originate from low-cost producing countries and then to transport, store, process and deliver to markets with high structural growth in demand. Through our expertise and knowledge at all these vital stages along these supply chains, we are able to create continuous links between suppliers and customers. Our relationships and know-how means the supply-pipeline through to our network customers leads to significant economies of scale and efficiency.
The Coffee Pipeline
The Cocoa Pipeline
The Sugar Pipeline
Summary Fund Specifications & Investment Terms
Min Additional Subscription:
1.0% of Committed Capital, payable monthly
1% exit fee first three months, 0.5% in second three months
Monthly NAV. Monthly Shareholder Reports
2 Billion USD