Fishtail Voices: Episode 2

Press play to:

• Discover Alisa's extraordinary journey into the finance and tech worlds as a female immigrant in NYC;
• Hear about her passion for supporting underserved small to mid-sized businesses (SMBs);
• Understand what's behind the increasing demand for structured alternative investments (like trade finance);
• and learn about the overall advantages of the non-bank lending sector.

We hope you find inspiration here, and learn a thing or two from Alisa! 

Transcript:

Ronit Wolf: Hello, everybody! This is Ronit Wolf, the Director of Marketing over at Fishtail. And I'm accompanied today by what I call a “Fishtail friend”, Alisa Rusanoff, who is the Head of Credit over at Crescendo Asset Management. We're super excited to have her with us! 

I personally met Alisa last year at GTR New York for a very brief minute, but didn't have a chance to delve into her experience. So I am extra excited to have her with us. And with no further ado, I am going to pass it over to Alisa who's going give you an overview of what her journey into this line of work has been. She has been in it for over a decade. She came from investment banking initially. She's been a founder herself. She's been a tech exec. And now she lands over at Crescendo. So welcome, Alisa! Thanks for being here. 

Alisa Rusanoff: Thank you so much for having me. It's a pleasure. Sure. So let me think where I can start. So I moved to, I'm an immigrant, a female immigrant, I should say. Makes it, you know, a lot of us in New York. So I moved to New York, or to the country actually, straight to New York about 14 years ago and I studied finance here in the city of New York. And it really kind of drew my interest towards a lot of investment opportunities, a lot of various types of finance and structures and really how you can change the world, how you can change small companies, small businesses and help them grow. 

So throughout my career, I've really been focusing on SMBs, small to mid-sized businesses or SMEs (some people call them small to mid-sized enterprises) in the US and abroad, because I really believe that this niche, even though there are literally millions of SMBs in the United States alone, are way underserved and underbanked and they all need a lot of various types of help on the operational side, on the finance side, sometimes some distribution side. So, these are the companies that are driving our economy. So that's super, super important, and interesting. And it's a pleasure to see in the last decade or so how the non-bank lending sector, as well as fintechs, are kind of driving that change and helping SMEs to grow and sustain their growth and capital needs. 

So in terms of my experience, I started investing in banking over 10 years ago in New York. It was a fun experience, as one can imagine. I was focusing on SMBs back then, and we were doing capital raises from...

Ronit Wolf: Were you focused on SMBs from the start (of your career)? 

Alisa Rusanoff: Yes, I was actually. So I've seen a lot of pain points and bottlenecks for SMBs from various angles that I think kind of helped me understand the needs even more so. So on the capital raise side, I was focusing on anything from a few million dollars to, I would say, 20, 30 million dollar raises on the equity side, obviously. So it's a great experience kind of getting into the industry, as an immigrant (again), getting into the cultural differences, understanding the sector, the structure, the tax, and other types of efficiencies and inefficiencies. So it was a great experience. I spent a few years of my career doing investment banking. And then I pivoted towards structured debt as part of the fund that we had back in the day. So, from that perspective, it was very much a similar angle, but at that point, we had a fund structure so we could basically lend the money out and we were doing that on our balance sheet. So it's a little bit different in terms of the risk profile and the risk management. Obviously, you know, in investment banking, you are introducing capital, you're doing analysis work and other types of capital introduction and capital raise work, and here it's on your balance sheet, it's your responsibilities, your risk and then it's your reputation, right? So it was a slightly different angle, I would say, that also taught me a lot. And it was a fun experience. In that particular structure, we did work with a lot of US SMBs. So that experience kind of brought a lot to my knowledge. 

Most recently (and I say most recently really means in the past probably 7 years at this point) I have been focusing on trade finance that really includes various types of structures and transaction types: supply chain, factoring or account receivable purchasing, embedded finance, ABL or asset-based loans, some term loans once in a while, consumer finance; of course, FinTech. So that career, as I mentioned, was quite a few years of experience at various types of companies. I co-founded more than one company in the past, doing those types of structures. 

Ronit Wolf: Was your start with trade finance when you when you were at Marco? Or you had prior experience?

Alisa Rusanoff: Yeah, I had prior experience before Marco. That's why I got hired. I was the first person to actually join the Marco founding members, that I'm still in touch with and very grateful. I started about seven years ago, the company called Zenith, and it was basically four founders of the company and I built credit and ops infrastructure from scratch. Then one of the partners and I split and started another company, Newbridge Global, with similar focus just backed by other types of investors where we grew close to a hundred million dollars in AUM, also focusing on US and international SMBs. So since then, I've really been focusing on both domestic and international transactions and trades and companies,. Because a lot of US SMBs are also trying to look into other markets to expand their distribution channels, to expand their growth. So it's a very helpful experience in understanding the pain points and the growth opportunities for SMBs. And we've been focusing on various types of industries. I guess my favorites are: consumer staples, consumer discretionary, including a lot of electronics, licensing, and various types of tech platforms in a service type of industry. 

Later we got into embedded finance, but also a lot of manufacturing, staffing companies, industrial companies. My investment banking background certainly helped with that, with understanding and doing analysis of those types of companies. And then in 2020, when COVID started, I basically joined Marco. That was my first and great kind of FinTech experience. As I was leaving the company

Ronit Wolf: What a time to join a trade finance company!

Alisa Rusanoff: Indeed. Everything was on hold, literally. And yeah, we were having virtual interviews. And it was obviously, you know, probably a year and a half full virtual experience. You know, rightfully so. But it was a great experience. I'm still in touch with a lot of people on the credit side. We're doing some partnerships with Marco as well in terms of participation. 

Ronit Wolf:I was going to ask you if you've had any specific lessons learned from being part of the early Marco team that you brought over with you to Crescendo, but I mean, I guess you partially answered that question by saying you're actually bringing over a potential partnership with them!

Alisa Rusanoff: Yes, of course. And obviously my experience on the tech side and Marco working with IT people, working with product people on the underwriting side certainly helped. 

We were focusing on a few Latin American countries to kind of underwrite the small businesses in an efficient manner, in a more streamlined and automated manner. It's something that I had been, you know, working on for a while. Certainly, Marco's experience gave me a Latin American focus that gave me a lot of knowledge of electronic invoicing systems, of various types of tools like SAC in Mexico and others. There's a lot of regulations that are being changed in the region. It's a very exciting region in my opinion, because it provides a lot of opportunities from a macro standpoint. Supply chains are pivoting towards the Latin American region, Mexico specifically, but also other countries as well. A lot of open banking changes and innovations are driving that success and driving VC capital to the region and to the startups that are trying to build something and disrupt the industry. 

So yeah, Latin American region and experience from Marco was absolutely great. I had done some Latin American deals in the past as part of other companies, but certainly Marco gave me a lot of tech/product experience. 

So when I joined Crescendo, as I was leaving Marco, it was a company of 40 plus people. So it was a growing, sustainable company at that point.  And I left to join my former partner. We partnered with Crescendo Asset Management, which is basically an asset and wealth manager based in Geneva with close to $4 billion AUM. And we are building the strategy for trade finance. And what I'm trying to achieve in this company, I'm trying to focus on a lot of embedded finance companies. I'm trying to focus on FinTech companies, but we've also built, and it's an ongoing process because you always want to improve yourself and your models, but we've built internal scoring matrix that are being obtained live from the client's bank accounts, through open banking systems, through client's ERP systems. We sync the data that certainly helps mitigate fraud, that certainly helps mitigate a lot of credit factors and credit risks. So it's a full kind of live system that gives you a snapshot at any point in time of how the client could look like in terms of the credit risk exposure. So yeah, that's, I think, a very great opportunity in modern markets. Trade finance presents a lot of opportunities now. And I know you did have a question about kind of COVID relation, right to trade finance. 

Ronit Wolf: Yes I had several questions related to the timing of you joining forces with Crescendo near COVID starting. I guess the first question is: 

1. Was Crescendo looking to expand their offerings into trade finance and thus came in contact with you, or was this something more you and your partner proposed to bring onto the table of Crescendo offerings? 
2. Secondly, why the timing, right? Why did Crescendo choose to do that at that time? Whether it was their idea, your idea at that time when you joined them in the start of COVID.

Alisa Rusanoff: Of course, that's a great question. So, we knew Crescendo for quite a few years, and we had conversations about some capital, you know, partnerships in the past, literally a few years before COVID even started. And at that point in time, the economy was totally different, supply chain was not a buzzword, right? And it was just a different angle. And it didn't necessarily move anywhere closer to closing the partnership. 

And when COVID started, the economy totally changed. And with the interest rate rising and inflation rising, or I should say inflation rising, thus interest rates rising, the logic is there. The economy and the macro side of it, and the micro as well, is absolutely changing. So investors in the United States and in other parts of the world, they're looking for higher yielding opportunities, relatively well structured in terms of credit risk, in terms of fraud risk. So kind of pure lending market has also changed. So, the credit risk is certainly much higher. If we're looking at scoring models now versus even two, three years ago, they are different, you know, we're seeing a different picture. Plus, the equity market collapse in 2022 certainly didn't help the situation, right? So there's a lot of capital, obviously, there's a lot of dry powder that's being held by VC companies, private equity companies, asset managers. 

So capital is flowing towards a safer and more structured type of offering, right? And trade finance, I think, is one of the better solutions. It's one of the alternative types of investments. And it can have various types of structures from letters of credit, that is basically a bank guarantee, where you do have operational risk, but that's in the hands of the management team to really mitigate those types of risks, whether it's fraud or operations, slash performance, or it's a credit risk, right? You can also get some type of credit enhancement, whether it's put option on the public company, or it's just credit insurance. And that product also exists in the markets and has been there for quite a few years.

So there are different ways to structure it. And depending on what type of markets you are targeting, whether it's an SMB market or a more kind of larger corporate clients, you can still get, you know, a few points more compared to less creditworthy term loans. Because another difference between trade finance and a typical loan structure, is the liquidity and the short-term paper that provides a lot of comfort to the investors. If you think about trade finance, you're thinking about some types of receivables or invoicing. Right? Usually, the invoice terms vary from on a minimum probably 15 days all the way up to 60,90 and in rare cases 120 days. Money cycles all the time. And a lot of investors obviously like that kind of liquidity that it provides to them. Or if it's not necessarily distribution driven, but it's compounded interest, even though we don't call it interest because it's really a true sale, we're just purchasing the paper. But in terms of the yield, it's really compounded yield that adds to your portfolio. Right? So trade finance became a larger piece, I believe, in a lot of portfolios in the US and across the world, and especially with change in supply chains in the last couple of years, since COVID started, with pivoting, you know, from China or, you know, other types of regions towards Mexico, something closer geographically, but also there is obviously global fears component to it. So, a lot of SMBs need help in providing working capital to kind of pay for their overhead, pay for their expenses. These are small companies that don't necessarily have a lot of equities on their balance sheet. They don't have a lot of cash balances in their balance sheet. So they're struggling. They're trying to survive. They're trying to pivot. So the PPE money obviously helped, but for a short period of time. And now they're looking for various types of solutions to really sustain their businesses. And this is where we help. 

Compared to the banks, I'm sure you know, and I'm sure you speak to a lot of people, but non-bank lending sector is much more efficient. It lacks covenants that the regular banking structure would really impose on you. And it's much faster, right? So efficiency and speed and flexibility of the structure. I think these are the main components of a non-bank lending sector and this is where we're trying to get various competitive advantages, focusing on various domestic and international type of trades. 

Ronit Wolf: Okay. I know that Crescendo specifically does traditional alternative and sustainable investments, specifically trade finance. Does Trade finance make up most of your alternative investments? What role trade finance plays within Crescendo's alternative investment solution. 

Alisa Rusanoff: Yeah, unfortunately I'm not on the wealth management side. So I'm not allowed and I'm not compliance blessed to share that information. But I guess I can just generally answer in terms of the markets, not specifically to Crescendo at all. But I'm talking to a lot of various types of groups and investors in Europe and the Middle East, generally in South America and obviously the US. And even compared to 10 years ago, the part of the portfolio that's invested into alternative types of investments, whether it's real estate or it's VC or PE or any types of other private debt structures or consumer finance structures, it's certainly been growing tremendously. And back in the days, probably 15 years ago, it could be a few points. Now it could go all the way to 10, 15, 20%, right? It really depends on the AUM present. If you're a larger, kind of pool of capital that can afford, you know, a higher diversification in terms of your alternative investments pool. Right? So it certainly depends, but it's also great to see various opportunities and, you know, various ETFs coming into the trade finance space specifically. 

Ronit Wolf: Okay. And I know you've touched a little upon this. Fishtail being a tech platform, we are particularly interested to know what types of different tech you're using on your end to make your job easier, decrease risk, etc. etc. And I know you mentioned one or two that you're using, but curious to hear if there are any more that you're currently using that you recommend. 

Alisa Rusanoff: Sure. I mean, obviously a lot of your customers and clients and partners are probably using Salesforce and I love that platform and it gives a lot of opportunities to customize the platform and really build integrations. As I mentioned before, like open banking and integrations with ERP systems and integrations with electronic invoicing systems that's very popular in Latin America, but it's also coming to the European region. Right? So a lot of various types of inputs are flowing through the model that we internally built. That's more a proprietary model and proprietary data tool that helps us analyze the companies live and certainly helps mitigate fraud because this is one of the highest risk in trade finance. If you look historically, even banks have been exposed to various types of fraud cases in the past. So it certainly spoke to a lot of investors in the last decade, but it's coming back with these types of technology tools. 

What I do believe will happen is it will bring a lot more investors. Because with a lot of various technology solutions and innovations, whether it's, you know, AI, chat GPT applications or it's open banking systems or it's kind of synchronizing the, you know, your QuickBooks or any other therapy systems together with any other inputs from other data providers, you can certainly flow that data and through a decision making mechanism and or tool to really analyze the the micro health, I would say of the company, but also understand on the macro scale where the company fits in, what's the quota for that type of trade, for example, or if there are any complications in terms of shipping, historically, or there has been any issues, let's say, with the customs information, right? So there are a lot of various types of inputs. And, you know, as long as you have some capability of AI, or even supervised machine learning algorithms, you can certainly help analyze it in a streamlined manner. And you don't need hundreds of people sitting in your office and doing the manual work that's honestly not even that interesting, right? So the tech can do it for you, it can do it better, it can do it more efficiently. And I've seen some companies trying to do some general ledger or like blockchain type of structures and put trade finance on this basis. Though I haven't heard of a successful way of that yet. But listen, we're at the very beginning of it. I'm sure as I mentioned, AI tools will certainly help with that. And you never know, maybe quantum computing will also be part of the equation. And I really think that they would help make trade finance a more democratic tool, to bring more capital to SMBs and to provide opportunities to various types of investors, not just large institutional investors. There's some good marketplaces, and I'm sure you know of some as well, that connect capital providers and SMBs or larger corporations for these types of investments. But I think there's a lot more opportunity to really streamline that process and make it much more efficient, and really  be comfortable with international trade because I'm certainly seeing that a lot of US financial institutions don't necessarily have an appetite for foreign receivables. You know, due to jurisdictions, due to various differences in terms of tax law and legal law and UC/ lien filing laws. And I think there is quite a way to really automate that process as well and make it much more efficient for US companies to really dominate the US market. It provides a lot of jobs to the US people, to the US labor market. And especially in this economy when you obviously know that with inflation, there's a high risk of labor and labor market to really hurt.

I really believe that we can add more jobs by doing so, by really supporting SMBs. 

Ronit Wolf: Totally. Quick question there relating to efficiency, Alyssa. I don't think I know. How big is your trade finance team over at Crescendo? 

Alisa Rusanoff: So the management team on this strategy itself are two people. It's my partner and I. Meanwhile, we have quite a few people in Geneva and other offices to help us on the marketing side, on the investment relations side, on the structure inside, etc. We have a robust back office. We have several people in our New York office as well.

So I would say less than 15. We're a very lean team, very efficient, or I hope we are. We've been kind of successfully, you know, trying to grow our book of business and diversify and make sure we do proper risk management for our deals in the trade finance space and in the industry specifically. 

Ronit Wolf: Okay, okay. So to close it off Alisa, I would love to hear what some of your content resources be them podcasts, blogs, books, people that you may have currently or that you have used in the past that sort of guide you, inform you, inspire you as you go along in your finance journey.

Alisa Rusanoff: That is a great question. I do like a few podcasts and one of them is not really related to trade finance, but related to, you know, the economy in general and VC markets. It's All In that I'm sure you've heard of. That's great. Another one. I do a lot of global affairs podcasts. I do a few kind of general podcasts like the Lex Friedman show.

In terms of newspapers, I get my news from Reuters. I think they're a very good, almost non-biased source. In terms of other economy sources, it's probably Wall Street Journal, it's probably The Economist, they're good sources. Specifically to trade finance, I like GTR. They have a very good magazine and media source. 

What else in terms of VC markets, which brings me a lot of embedded finance opportunities and fintech opportunities. I like this week in fintech and NYC women in fintech, which I'm also a member of. I like seeing a lot of various types of SMBs kind of growing up there. It's a good deal origination source for me, but it's also a great learning tool for me. 

In terms of other podcasts, there's a great podcast that I'm trying to recall right now. It's about implementing AI into the financial services. I believe it's that's  how it's called. It's the AI in financial services.  Yeah, that's what inspires me! 

I also try to, you know, write sometimes for various sources when I'm kind of being invited or asked to. And it's a great tool for me personally, when I'm writing about some specific topic, whether it's, you know, SMB, FinTech and SMB world, or it's embedded finance. I learn a lot myself because I do a lot of research. Obviously with Chat GPT, it makes it much easier to kind of get access to a lot of data in a more efficient and, you know, fast manner. So that's also a great way for me to learn things by writing. So maybe it's a very unique and personal way, but it certainly helps me. 

Ronit Wolf: Do you have a blog, Alisa? 

Alisa Rusanoff: I don't have a blog, but I do get posted on various types of sources. I've been posted on SFNet, which is a secure finance network, Opus Connect… Sorry, go ahead. 

Ronit Wolf: I was just gonna say, I'm personally curious to read them too. 

Alisa Rusanoff: So, yeah, absolutely. Sure. Of course. And yeah, I mean, it's actually great because I've never done a podcast before I do a lot of panels in person. So it's a little bit terrifying because it's just my voice. And, you know, usually in person, a lot of kind of gestures and, you know, body language helps kind of having a conversation. But I really appreciate your help and, you know, your great attitude towards our podcast today. 

Ronit Wolf: Yes. Thank you for joining us. I'm super happy to have you on, learn a little bit more about the trade finance on the general asset management side. Your journey is super inspiring!

All the different paths that led you to where you are today. I'm sure, as you said, you took grains of sand from every place you were at, being investment banking or being a founder yourself or being at Marco and kind of bringing it all together to Crescendo. We're so lucky to have you. And thank you for being a Fishtail friend, for joining us today. And I look forward to continuing the relationship. 

Alisa Rusanoff: Thank you so much. Thank you for your time. And looking forward to seeing you in person again soon.