Monthly Letter – March 2023

“How quickly things change. Not long ago analysts thought the global economy was powering ahead; now they worry about a deep recession caused by fallout from the banking turmoil.”

— The Economist Magazine

 

The watch words now for our team could well be “the only certainty is uncertainty.” We continue to provide funding to our financial partners, who in turn are supporting their small business clients around the world. Particularly those that are women-owned or women-led. And we carefully review the risks on an ongoing basis. What are some of the risks? Inflation. Interest rate movements. Local, regional, and global economy dynamics. The resetting of value chains. War.

Touching again on the recent banking crisis — for now we see that it has generally been restricted to Silicon Valley Bank, First Republic Bank and other small US banks. While there are obviously implications for the wider banking sector of potential paper losses on their treasury and wider long dated fixed income portfolios, we aren’t seeing a large systemic problem for the banking sector as a whole, at least in the short to medium term. We also haven’t seen any direct impact on us or our partners as no party had any material relationship with the banks that faced issues. What it has brought into sharp focus for us at AGC, is that within the fixed income space, proper liquidity management and duration matching is of utmost importance. We did have our own liquidity event late last year and we’ve demonstrated our ability to manage our liquidity position and ensure that we are able to meet redemption requests in line with the terms in our offering documents.

In March, we were humbled to accept an additional investment from one of our early investors — a private investor who has a long and distinguished career at a leading private investment firm, and who has a number of other endeavors including founding a private foundation in Africa that advances the development of global leaders, innovators and entrepreneurs.

Monthly Letter – March 2023In other news, Advance Global Capital celebrated their inaugural team offsite in Portugal in March. The event allowed both the London and South Africa office teams to come together and discuss our targets and objectives as well as further develop our company culture. In addition to team building activities such as competitive treasure hunts around Lisbon, the team had the opportunity to meet face to face with colleagues they typically work with remotely. During the proactive week in a new atmosphere, we shared key insights with each other, whilst various work activities challenged everyone to immerse themselves in a collaborative environment and deepened working relationships with each other by fostering a unique company culture. Collectively, we move forward as one to further our mission of supporting SMEs all over the world with their working capital needs.

Our latest case study examines how one of our partners is helping to fuel economic impact through the Carnaval de Barranquilla festival in Colombia. As a significant driver of invaluable tradition and heritage, Carnaval de Barranquilla is one of the largest festival organizations in the world. Our partner has been able to help promote productivity and services driving opportunity for actors of the festival and generating significant impact for the local Colombian people. In addition, the Museo del Carnaval demonstrates how this heritage is preserved and shared with the local community of Barranquilla.

Best,
Sudha

 

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