What is an investment strategy?

A strategy is an automated investment mandate that a funder can configure to automatically purchase invoices that meet select criteria. It is currently the only way for funders to make investments on the platform.

Understanding Strategy Terminology

• Strategy Name - The name you give the strategy when you create it, i.e. typically the obligor's name.

• Currency - The currency of the invoices to fund.

• Country - The country of the invoice payer.

• Invoice Payer - Name of the invoice payer who the strategy relates to.

• Return P/a - The investment's expected rate of return over a year.

• Term - The tenor you set when creating the investment strategy, i.e. the system will only purchase invoices that fall within this tenor.

• Exposure - The amount currently invested in invoices that haven't been repaid.

• Limit - The maximum exposure of the strategy.

• Utilisation - The percentage of your limit that is utilised.

• Accrued Return - The return that has been earned.

• Realised Return - The return that has been received.

Prerequisites to creating an investment strategy

To create an investment strategy you need to:

1. Deposit funds into the wallet you wish to use for the given strategy.

2. Have the permission to invest in the given payer (obligor).

3. Ensure that the platform administrator has set up at least one active seller relationship for the payer.

Creating a new strategy

The steps of setting up and managing your investment strategy:

1. Switch to Funder Mode (by disabling the toggle at the top of the screen)

   

2. Open the Strategies page

   

3. Click Create New Strategy

   

4. Give your strategy a name and set your investment criteria

   

   • Strategy Name – Give the strategy a name that you can use to identify it after creation (e.g. name of the obligor).

   • Expected Annualized return – Set your desired annualized return (this range is automatically calculated based on the available deals, i.e., in the above example, the range shows that available deals have an annualized return of between 5%-7%).

   • Term – Set the minimum and max tenor.

   • Currency – Set the target invoice currency.

5. Select the payers you want to include in the strategy
   
   Based on the parameters you set in the previous step, the system will automatically filter the payers available for investment, as shown below. To proceed, select the payers you want to add to your investment list and click the Add Selected button.
   

   

6. Set your commitment period, wallet, and investment limit.
   

   

   
   Commitment Period – Enter the commitment period according to the agreed value in the Term Sheet signed with platform admin.

   Wallet – Select the wallet that you will be using for this investment. You will not be able to set an investment amount that exceeds the wallet limit (balance).

   Amount – Set the investment limit (based on the currency of the selected wallet). The limit you set cannot exceed the wallet limit (balance).

   Save Strategy - note that if you have not completed the steps above as described, the “Save Strategy” button will remain disabled.

7. View created strategy
   

   The list of strategies you have created, will appear on the strategies page shown below.
   

   

   
   

Editing strategies

1. Click on the edit icon

   

2. Make the needed changes
   Please note that the strategy amount cannot be less than the current exposure. Please close the given strategy and create a new strategy with the desired limit to reduce your exposure.

   

Closing strategies

1. Click on the close strategy icon

   

2. Submit confirmation

   

Upon closing a strategy the following will occur:

• Investments for that strategy will stop.

• Non-utilised funds will immediately be returned to the respective wallet the strategy was linked to.

• Utilised funds will remain invested in the strategy until they are repaid by the respective payers/obligor.