Investors Pull $1.8B Out Of Trade Finance Fund

Investors have pulled about $1.8 billion from a supply chain investment fund operated by GAM and Greensill, reports in Financial News said Friday (May 10).

The GAM Greensill Supply Chain Finance fund was worth about $2.58 billion last week, a value that sunk to just $813.06 million as of Friday, reports said, citing Bloomberg data. GAM, a Switzerland-based investment firm, has struggled to manage client withdrawals and share price drops in recent months, while a high-profile fund manager was recently fired by GAM following allegations of his investments in Greensill-sourced assets.

In a statement, a GAM spokesperson said the supply chain finance fund’s value fluctuations “are … a regular part of this business.” But unnamed sources told the publication that such a dramatic drop in value is not normal.

News of the investor pullout of the GAM Greensill fund was soon followed by reports in Bloomberg on Sunday (May 12) that SoftBank Vision Fund would invest $800 million in Greensill as it focuses on technology development and international expansion.

One of the fund’s largest investors, Vodafone, has reportedly confirmed that it recently began to redeem investments made in the GGSCF fund.

In March, reports in Bloomberg drew attention to Vodafone’s investment in the fund, with critics raising concerns over why the company is, in essence, making money off late payments to suppliers.

The company reportedly invested $11 billion in the fund, which finances trade by paying suppliers more quickly for a discount on their outstanding invoices. Many of those invoices are from Vodafone’s 15,000 vendors, reports said at the time, citing unnamed sources. The company averages 48-day payment terms in its accounts payable, versus the industry average of 36 days.

Critics questioned at the time why Vodafone was using its capital to invest in supply chain finance, rather than to simply pay its vendors more quickly.

But in a statement provided to the publication, a spokesperson for the company said it is the supplier’s choice to utilize supply chain financing, “and Vodafone has absolutely no say in it.”

“GAM has a fiduciary duty to select the best risk/return trade receivable assets for the fund,” the spokesperson added. “Vodafone has no influence on which assets are selected by the fund manager.”