Federated Investors, ITFC Plan Trade-Finance Portfolio

By Dipo Olowookere

One of the largest investment managers in the United States, Federated Investors, and the International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, has announced an agreement to launch a sovereign energy trade-finance portfolio.

The ITFC Sovereign Energy Fund (ISEF) will be sponsored and managed by ITFC with strategic input from Federated Investors (UK) LLP.

The portfolio will be a private offering available to ITFC’s qualified investors across the Member Countries of the Organization of Islamic Cooperation (OIC) and ITFC’s global partners. It will invest primarily in energy-related trade finance, structured trade, export/import finance, supply chain financing and project finance assets of sovereign entities across the energy value chain in OIC member countries. ISEF aims to raise $300 million for its first close.

Importantly, the portfolio will be Shari’ah compliant with investments realized through transaction structures that rigorously adhere to Islamic principles. The portfolio is expected to launch later in 2018.

“We are pleased with our cooperation with Federated Investors. The ITFC Sovereign Energy Fund (ISEF) marks our first joint initiative and we are looking forward to its success in the market as it paves the way to develop other business opportunities together,” said Eng. Hani Salem Sonbol, ITFC Chief Executive Officer.

Federated and ITFC have worked together on a broad array of Islamic trade-finance transactions since 2014. This joint initiative to create a new sovereign energy portfolio is tied to the belief that as the worldwide demand for energy continues to grow, a pool of trade-finance transactions can consistently deliver the alpha that investors seek.

“After working with ITFC over the past several years, we look forward to expanding our relationship by bringing Federated’s specialized trade-finance expertise, deep understanding of risk management and all the experience of Federated’s global fixed-income team to investors pursuing attractive opportunities built on the highest ethical standards,” said Gordon J. Ceresino, president and chief executive officer of Federated Investors (UK) LLP.