(Bloomberg) -- Private commodity financier Kimura Capital LLP is closing its London-based lending business, the latest exit from a sector that has witnessed a flight of capital in recent years.
Kimura — which had grown into a significant lender to commodity trading companies — is shutting its financing arm and returning money to investors including Goldman Sachs Asset Management, according to people familiar with the matter who declined to be named discussing sensitive details.
Spokespeople for both Kimura and Goldman Sachs separately declined to comment.
Credit from banks or other financiers is the fuel that powers the commodities-trading industry, backing multi-million dollar shipments of everything from corn to diesel as they’re moved around the world.
But market shifts related to the Covid-19 pandemic uncovered a series of commodity trading frauds in Singapore and Dubai, and banks pulled back from large swathes of the industry. That left private credit providers to finance small- and medium-sized traders, often at higher interest rates.
Kimura’s exit adds to an already tough December for the commodity trade finance sector. Invoice-financing provider Stenn Technologies was put into administration after its main lender, HSBC Holdings Plc, raised concerns about the firm’s client list.
Other Kimura ventures in commodity logistics and sports management will continue operating, one of the people said. However, a commodity hedge fund proposed earlier in 2024 with investment managers from Gaspara Asset Management will not move forward.
“Despite gaining positive traction with several institutional investors, Gaspara took the decision to exit the proposed joint venture with Kimura in November,” a spokesperson for Gaspara Asset Management said. It “continues to manage the Gaspara Blue Fund in continuity since December 2021, with the same strategy, investment team and structure.”
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