Q. Where do organisations like Falcon fit within the trade finance eco-system? Falcon is an additional source of funding for clients. This may be due to the fact some clients have a more sophisticated need than the plain-vanilla financing they have previously experienced, or that their current arrangements can cater for.
Our approach is very much based on having a deeper understanding of our clients, which allows for some strong structuring. For instance, during the financial crisis of 2008-2009, Falcon actually increased its lending to clients – sometimes stepping in to bridge a critical funding gap left by the withdrawal of traditional sources of funding. How did we do this? First, we are a true partner. And second by being innovative. There are no off-the-shelf solutions at Falcon. Everything is structured although nothing is over-structured. It is the client that is paramount.
Q. Continued unrest in the Middle East: Challenge or opportunity? It is both an opportunity and a challenge. Our business is structured, so we are hedged against such risks. But we recognise that some of our clients with major dealings in these countries may be seeking reassurance, and strong structuring, to deal with the heightened risks. Certainly, the unrest has been a proof of concept for us. As far as we are concerned, it is business as usual.
Q. Falcon has grown fast since it was founded, but is this growth sustainable? We think so. In fact we think this is just the beginning. Falcon Group is on a steep but sustainable growth curve with the aim of hitting $5bn turnover in the next five years. Our business model is global and we have the strength and track-record to scale it up. I’d say we have only scratched the surface so far.
Q. Where can boutique trade financiers add most value for clients? Our core focus is as an additional funding source for clients. Many banks remain shy with respect to lending, even to long-standing clients. This means there is definitely room for additional funders to support corporate activity, whether trading or for working capital. We start where the banks stop. And while the banks mostly offer plain-vanilla financing, we look for a more engineered solution – helping clients receive the funding they need in the most efficient manner possible.
Q. What’s next? We are developing our core business in all regions of the world. We believe that strong growth in the coming months is likely to come from the Americas and Europe, although we remain strong – and focused – in the Middle East and Asia. We are also working on developing our own funding sources with an eye to a commercial paper issue to further fund Falcon’s growth. Certainly, we are always looking for new areas of expansion.
One of the great advantages of being independent is our ability to be nimble – both in terms of the services that we offer our clients, as well as our ability to pursue new opportunities. This makes us very open minded and very inquisitive regarding the future.
Anything that helps grow the business is interesting, which is why we have also been developing the thought leadership side of the business – hence the success of our recent Second Annual Falcon Trade & Corporate Finance Forum in Dubai. This is now an annual event and it keeps us at the cutting edge with both our existing and potential clients.
Will Nagle is CEO of Falcon Trade Corporation. He can be contacted by emailing WNagle@falcontradecorp.com
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