Short-duration alternative fixed income.

Lepus Capital Management Group is being formed as an independent investment adviser specializing in trade finance assets: short-dated receivables arising from international trade, managed for institutional and qualified investors.

Trade finance

With origins in ancient Mesopotamia, trade finance is among the oldest forms of credit. It yields assets whose features remain attractive to fixed income investors.

Short term

Obligations self-liquidate in the ordinary course of business, typically within 30 to 120 days; the absence of forward purchase commitments facilitates exit.

Floating rate

Receivables are purchased at a SOFR-based discount to face value fixed at the outset; as the portfolio turns over it re-prices to prevailing rates, limiting interest-rate risk.

Bifurcation of risk and return

Credit exposure is to an underwritten importer; return is a function of the supplier's cost of working capital; the investor is exposed to the one and paid by reference to the other.

Low historical losses

The ICC Trade Register records low default and loss rates for trade finance instruments, which may be attributed in part to the multiple layers of recourse they carry.

Insurance and leverage

Credit insurance and bank leverage may be available on pools of trade receivables; each adjusts the risk and return of a portfolio.

These characteristics do not eliminate credit, fraud or operational risk. See Disclosures.