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ABOUT BARAK

Experienced origination and fundamentally driven credit approach.

Executive Summary

Barak Fund Management Limited (“Barak”) uses a time-tested approach to originate, acquire and manage structured commodity-backed transactions across more than 30 African countries.

The natural progression of financing in Africa has led Barak to originate and manage longer-term asset-backed deals and projects, primarily focused on agri-financing requirements but not limited to such commodity sectors.

Focused Proven Strategy

  • Barak seeks to generate equity-like returns in a capital-constrained market with relatively low volatility and limited correlation to the broader markets
  • The company strategy focuses on fully-funded or blended debt in the African commodity markets, using asset-backed loans with various forms of collateral
  • Portfolio Managers manage USD liquidity with respect to investor subscriptions and deployment, as well as underlying debtor repayment. The advantage that Barak has is encapsulated in the company’s ability to access payment in an environment of local currently volatility

Seasoned Management

  • Fund managers average 14 years of experience in commodity derivative and physical commodity trading and international banking in Africa.
  • The senior management team is a hand-picked group of specialists with significant expertise in agricultural commodities, structured trade finance, logistics and loan management.
  • Barak maintains a presence in Mauritius (Head Office), South Africa, United Kingdom, Kenya and Ivory Coast to ensure that the correct measures are put in place from a capital raising and correlating Barak fund deployment

Robust Process

  • Disciplined, repeatable investment process focuses on strict controls, senior liens with strong covenants and shorter duration investments
  • Experienced origination and conservative credit approval terms provide control over portfolio composition and asset management, enhancing fund performance
  • Although Barak’s strong advantage over banks is vastly quicker turnaround times, the Investment Committee is made up of ex-bankers who maintain the same level of strict reviews once a potential deal is addressed by a Deal Originator to the Head of Credit

Risk Management Culture

  • Risk considerations are deeply embedded in every aspect of the investment process, from origination to underwriting and exit.
  • Barak focuses on worse case scenario analyses prior to pursuing any investment opportunity.
  • With the implementation of the newly revamped Barak Internal Deal System, the Barak COO and Operations Team, along with the Compliance Team, maintain a level of monitoring and administration that is in line with global risk management pertinent to any investment asset class

Alignment of Interests

  • Partners are Barak’s majority shareholders and have tied employee compensation to long-term Fund performance.
  • Barak maintains a strong firm-wide commitment to best-in-class operations, compliance, and client service.
  • Investor returns remain the top priority for Barak; in saying this, the activities in which active credit funds are involved in Africa produce a better life for borrowers, from job creation and food security. The outcomes that Barak continues to produce focus on the Barak funds’ returns as well as making a difference to trade and asset-backed finance that Africa so desperately craves

Fund Awards

Barak STF

Barak’s Competitive Advantages

Broad Investment Scope

Flexible operating environment allowing for innovative deal structures which enhance investor return. Basel III, Dodd-Frank and Volker rules provide Barak with the opportunity to invest across a wider investment universe.

Specialized commodity trading skills

Most bank specialist trade finance areas lack physical trading skills, thus limiting the deals they can execute. By integrating its commodity financing skills with risk management skills, Barak evaluates the whole supply chain and seeks to achieve enhanced returns for normal credit-based risks.

On-the-ground credentials and access

Managers have been based in Africa for years, and have gained extensive local expertise and networks across the continent. Affiliation with large Africa focussed trading houses, which own and rent storage capacity in Southern Africa, East Africa and West Africa, giving Barak strategic access to more than 30 African countries. We believe that Barak is currently the only Fund that has strategic access to 481 warehouses in eastern, southern and western Africa in which to store commodities.

Broad transaction-sourcing nerwork

Established market presence and relationships with the most prominent traders, financial brokers, commercial and investment banks on the African continent. Access to an extensive pipeline from which to select the most lucrative transactions Fund’s approach facilitates the building of a diversified, high quality investment portfolio.

Impact investing in Africa

Barak maintains a level of impact investment reporting through all of its short, medium and long-term transactions to ensure that it adheres to its Barak Social Responsible Investing Policy. The need for alternative credit in Emerging Markets around the world, not least in Africa, is a crucial element that needs to be addressed by the likes of Barak in order to give functioning SME companies a chance. Global trade remains the roots of the world’s economy, and the opportunities for Barak to make a difference in its activities continues to grow year on year.

Investment Philosophy

Controlled, Disciplined Approach

  • Barak favors companies in established markets and commodities that are conducive to lending and credit analysis
  • These companies are typically stable, predictable and have low default rates due to high commodity turnover and ability to liquidate stock

Invest Alongside Established Market Participants

  • Barak seeks to partner with well-known international banks to provide senior debt/co-financing on selected transactions
  • By investing alongside these participants, the Fund benefits from their deal sourcing capabilities, investment judgment, controlling ownership position, and operational and financial expertise

Exert Influence Over Financing

  • By acting as a lead or co-lead in the financing of the majority of its transactions, Barak seeks to gain significant influence over the structure and terms of financing
  • Barak seeks to obtain enforceable priority security interest in the collateral

Portfolio Diversification

  • Barak believes that a diverse portfolio mitigates economic, sector and country risk
  • Commodity allocation and country allocation play a dual role in providing investors with a diversification benefit

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