Barak Fund Management (Barak) is an African-focused fund manager operating in the credit space, with funds diversified along the yield curve. Barak has become synonymous with trade finance, given the flagship Structured Trade Finance Fund has close to a decade-long track record with a 100% hit rate. With in excess of US$1 billion assets under management – the majority of which are concentrated in trade and working capital – the team of more than 60 spans across Africa and extends to Europe.
Other funds in the short end of the curve (deals maturing within one year) include the Barak Impact Finance Fund and the Barak Sharia Trade Finance Fund. For deals requiring trade finance and expansion capital, the Mikopo Structured Credit Fund, employing leverage, targets borrowers who need funding for less liquid assets maturing within four years. The Barak Asha Impact Fund is a closed-end vehicle, targeted purely at agricultural assets with measurable socio-economic development aspects.
With transactions in more than 25 countries, predominantly in sub-Saharan and East Africa, and collateralised by no less than 30 commodities (approximately 15 commodity sectors), the fund manager has deployed in excess of US$2.5 billion since inception for both inter-regional and cross-continental trade. With demand from African SMEs for growth and expansion capital, Barak is extending longer-dated funding, enabling growth and develop-ment within segments of economies that were previously excluded.
The Cayman-domiciled funds are managed outside of Mauritius, with the advisory and main operations in Johannesburg, South Africa. Other locales – primarily for deal origination and/or representation – include Cape Town, Nairobi, Abidjan, Accra, London and Switzerland.
The team has the advantage of agility, superior market penetration, expansive networks and the ability to manage exposures in order to transact successfully. Barak’s strategies focus on fully funded or syndicated debt in the African growth and expansion capital finance space, using asset-backed loans with various forms of collateral verified by independent collateral managers.
Africa presents nuances, which – with the team’s considerable insight – are addressed. Barak mobilises decades of combined expertise, proprietary relationships, market presence and stealth in order to monetise opportunities. The senior management team is a hand-picked group of specialists with significant expertise in agricultural commo-dities, structured trade finance, logistics and loan management.
The Barak investment approach is based on the principles of discipline, diversification, collateralisation and downside-case scenario valuation. The company acknowledges that Africa presents numerous risks including but not limited to macroeconomic, political, liquidity (currency) risks, over and above traditional business risk. Each investment is approached with a stringent on-boarding process – using desktop and on-the-ground due-diligence processes – in order to determine the viability of a potential project’s funding.
Deal originators have the advantage of accessing capital along the yield curve, enabling multiple business requirements to be addressed. Thus, as a business owner in Africa, Barak presents an opportunity to obtain finance in line with business require-ments, and to ensure it creates a strong partnership for the long term.
Extensive networks are key to enabling growth of deal pipelines, with more than 70% of clients being repeat borrowers. Barak has the benefit of extensive technical expertise on a per-sector basis, specialising in agricultural commodities, resources and renewable energy. Deal originators are also active in metals trading, accessing markets across the continent open to a select few. By creating additional trading opportunities for borrowers within its network, Barak strengthens relationships, adding further value.
Barak aspires to be the partner of choice given its reliability, flexibility and understanding of generally uncharted terrain.
With a growing lack of funding due to increasingly difficult regulatory constraints in banking, Barak is a key partner for traders and businesses, enabling seamless business continuity in the face of broad regulatory stringency.
