Finverity launches solution for institutional investors in supply chain finance

This allows Finverity to connect both institutional-level funders and fund/asset managers operating their allocations via segregated accounts, providing visibility and control over investments. The launch of this functionality addresses a key gap in the market and is expected to lead to an increase in investor flows and liquidity in supply chain finance.

Investor allocations to SCF are often routed through multiple fund managers or intermediaries. This has led to industry fragmentation and a lack of visibility and standardisation along the money chain. As a result, investors lack coherent and accurate reporting across all their allocations. Despite multiple lessons and red flags, most recently from Greensill’s collapse, investors in SCF to date have not been offered the required transparency and control over how their money is invested.

According to the official press release, the banking sector’s traditional position as the main provider of funding to SCF has led to a lack of suitable investment infrastructure available to channel the growing flows from private capital sources into SCF as an asset class, particularly into mid-market companies in emerging markets, which is a focus region for Finverity. These investors are increasingly attracted by the potential high single-digit yields coupled with the low risk that SCF can provide. Several specialist, non-bank investment groups have grown in recent years and now account for the 20% of the SCF market not controlled by large banks, according to Oliver Wyman.