Commodity Watch: Lending Through the Ages

13 July 2026

Ahmad Al-Sati

<div class="grid grid--33-66-col"><div class="col"><img loading="lazy" src="/getContentAsset/061c994a-a452-418f-bfa0-f2cf3cf5c577/cb87803a-320c-480f-ab75-7b9029eaaf79/Ahmad-Al-Sati-new.png?language=en" alt="Ahmad Al Sati - insights" title="Ahmad Al Sati - insights" style="width: 180px" class="fr-fic fr-dii"></div><div class="col">AHMAD AL-SATI PRESIDENT OF GEMCORP CAPITAL ADVISORS LLC, PORTFOLIO MANAGER Ahmad Al-Sati is Portfolio Manager of the Gemcorp Commodities Alternative Products strategy (GCAP) and President of Gemcorp Capital Advisors LLC, based in New York. He is responsible for leading Gemcorp’s commodities-focused investment strategy and overseeing the firm’s US advisory platform.</div></div><hr>Clay tablets in ancient Mesopotamia were used to record the terms of loans. The first recorded instance of such a loan in ~2500 BCE centred on a long-standing dispute between two city-states over leased land, missed payments and destroyed collateral, which ultimately led to war and the first recorded calculation of compound interest.   Since then, the instruments, structures, and wrappers have become more sophisticated, but the basic construct is static: a disbursement in exchange for a recorded obligation to pay in the future with, at times, underlying collateral.   Recently, private credit transactions have come to the fore as direct loans to private equity companies (80% of all private credit) with a heavy dollop of software exposure (20% of loans) have collided with investor redemptions and AI-driven capital demands. As this indigestion (so far most of the funds are meeting their contractual obligations if not their investors’ liquidity demands) works its way through the system, the increase in demand and supply for credit has not abated. The delivery method, however, may have shifted.   Asset-based finance (ABF) is perhaps the most relevant. ABF is a catch-all phrase describing financings where assets (financial or real) are the security. ABF includes asset-based loans, royalties and equipment financing. It allows businesses to fund their operations and growth and permeates our economy. The private ABF market has grown from US$3 trillion in 2006 to US$6 trillion today and is projected to reach US$9 trillion by 2029.   The benefits of ABF can be many. ABF provides diversified income secured by pre-specified assets and has some of the lowest correlations to other investment strategies. ABF structures typically self-liquidate within a pre-specified time frame lowering refi, duration, vintage and DPI risks. Bespoke structures help provide better spreads, robust collateral and structural protection. For some essential assets (e.g., food, energy and certain commodities), a relentless diversified bid provides a buffer against a credit downturn as uninterrupted demand means a commensurate need for capital.   Yet, as with all financial assets, caveat emptor – risks exists and are real. ABF has many subcategories, each of which requires specialised knowledge. Underwriting know-how and resources are thus needed to originate, manage and monetise loans in each subcategory. Diversification across ABF is also key. After all, overexposure to residential or commercial mortgage-backed securities in 2007 was detrimental. Close nexus to the collateral is also important – being twice removed from an asset through some financial structure minimises benefits.   A prism to look at ABF might be SHIELD. A strategy with Short-duration credit (S), Hard asset collateral (H), differentiated Income (I), Enduring demand for its assets (E), adequate Loan-to-Value (L) and secured Debt (D) meets the general benefits of ABF and addresses risks. That mnemonic may also provide a framework to assess the benefits of any given strategy within the larger ABF universe. Sources: 1 CNBC (2025). Asset-backed finance is growing fast and drawing new scrutiny.2 KKR. (2025). Asset-Based Finance: Private Credit Hidden in Plain Sight. Important InformationThis content has been prepared solely for informational purposes by Gemcorp (as defined below), is confidential and may not be reproduced.This content does not constitute an offer or solicitation of an offer with respect to the purchase or sale of any security and should not be relied upon when evaluating the merits of investing in any securities or form the basis of an investment decision. 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