* Targets include pension funds, private wealth
* Poaches three executives from BofA Merrill
By Emma Farge
May 2 The fund arm of Swiss-based trading house
Trafigura is seeking to raise $1 billion for trade and
commodities finance, the company said on Wednesday, as it seeks
to expand in a realm traditionally dominated by European banks.
The quest for new funding forms part of a broader drive by
Trafigura's hedge fund Galena to increase its assets under
management to $4 billion by the end of 2013.
Trafigura said it will target "liquidity rich but risk
averse investors such as pension funds, insurance companies,
corporate and family offices."
Trafigura also said that it has hired a team of three
executives from Bank of America Merrill Lynch
- Christoph Gugelmann, Stefano Sabbadini and Philip Jan Kok - as
part of the trade finance expansion.
"By participating in the financing of commodity trading
operations, investors will be able to monetise the value of
liquidity in a market that, until recently, has only been open
to banks," said Pierre Lorinet, chief financial officer at
"Notably this initiative will also provide distribution
channels for those banks seeking to deleverage their balance
BofA Merrill declined to comment on the departures.
Trafigura created a commodities trade finance fund in the
third quarter of 2010 which it says has returned 7.88 percent
since its inception.
Since the fund's launch, French banks like BNP Paribas
and Credit Agricole have retrenched in trade
finance because of exposure to euro zone debt and difficulties
in conforming with new rules.