Our Philosophy
Structured trade finance depends on discipline. Capital moves quickly, transactions are short, and the goods behind them are constantly in motion between producer and buyer. This guide sets out how Teybridge approaches risk across its Structured Trade and Commodity Finance activities, from the philosophy that shapes every transaction to the specific criteria used to select clients and manage exposure.
A Capital Preservation Philosophy
Teybridge's risk management framework is built on a single governing idea: capital preservation comes first. Risk is managed primarily through transaction structuring, control over the financed commodity, and certainty over cash flow. This translates the Group's Credit and Investment Policy into an operational system that governs every transaction from origination through to final repayment or exit.
Short-Term, Self-Liquidating Transactions by Design
Teybridge deliberately concentrates on self-liquidating, short-term transactions where repayment is directly linked to the underlying trade flow, rather than to a borrower's general creditworthiness. This structural choice limits exposure duration and allows risk to be continuously recycled and reassessed. Trades typically run for an average duration of 180 days or less, and the goal throughout is a high-quality, diversified portfolio with low default and loss rates, built through disciplined underwriting, strong collateralisation and conservative advance rates.
Client Selection: Who Teybridge Works With
Teybridge's investment philosophy is conservative by design, recognising that structured trade finance depends heavily on the strength and integrity of the supply chain behind it. Clients must be either well known to Teybridge or thoroughly vetted through rigorous due diligence against a defined set of criteria:
- A reputable standing within their industry
- Demonstrated financial and commercial solvency
- Efficient operational and administrative practices
- A comprehensive understanding of the relevant product or commodity and its market dynamics
Off-Taker Creditworthiness and Product Fungibility
Beyond the client itself, Teybridge ensures off takers maintain creditworthiness through credit insurance or backing by letters of credit. Transactions are also expected to involve fungible, readily tradable products or commodities, which helps mitigate price risk and keeps the underlying asset liquid should intervention be needed.
Due Diligence Before Every Transaction
Before any financing is extended, thorough due diligence is carried out on the client, the product or commodity being traded, and the relevant market environment. This ensures a comprehensive understanding of the transaction before capital is committed, rather than relying on standardised credit models that may not reflect the realities of a specific trade or market.
No Direct Credit Risk, No Price Risk
Teybridge does not assume credit risk directly. Where credit risk exists within a transaction, the Group seeks to shift, sell or insure it rather than hold it. Any risk that is accepted must be fully understood and paired with an effective management plan, including standard operating procedures, to control and monitor it throughout the life of the transaction.
Price risk is treated the same way. Teybridge does not accept price risk, which means the price of any financed commodity must be fixed, hedged, or marked to market before the transaction proceeds.
Ownership and Active Management of the Underlying Commodity
To further reduce risk, the financed commodity or product must be either owned outright or held under constructive ownership, meaning it is treated and controlled as if legally owned. Throughout the supply chain, the commodity must be actively managed and insured, and the Group only deals with clients and commodities sanctioned by its investors and relevant global authorities, keeping every transaction aligned with international standards and regulatory expectations.
Where This Leaves Clients
Taken together, these principles describe a deliberately conservative approach to a market that is often anything but. For SME importers, exporters and commodity traders, it means access to working capital that is structured around the trade itself, backed by real collateral and clear terms, rather than a standard credit facility built for a different kind of borrower. For Teybridge, it is what allows the Group to support trade at scale while protecting the capital behind every transaction.
Tuesday 1 September
