Tag: agricultural investment

Episode 11 – Mark Bishop – ACP Capital Markets

Vets In Ag Podcast
Vets In Ag Podcast
Episode 11 - Mark Bishop - ACP Capital Markets
Loading
/

It was like a knife fight in the closet.

This from our guest today, Mark Bishop, as he described a complex Brazilian farmland assignment they worked on during the height of the financial crisis, which including hiring armed guards to protect the asset.

Mark Bishop is a Managing Director and Partner with Aldwych Capital Partners, a specialized merchant and investment bank focused on cross-border capital raising, M&A, and advisory assignments within the real asset sector. ACP is heavily concentrated within this sector in large scale agribusiness, water, and energy as well as related components of the value chain including transportation, logistics, storage, and power generation. They also work opportunistically in the defense/security and special situations areas.

In this episode, Mark talks about his original involvement with the veteran community in New York and how impressed he was with their innovation and dedication to helping other veterans. My sense is that this was an uncommon virtue within the everyday world of investment banking that Mark immediately lacked onto this and the sense of servitude it demonstrated.


It also speaks to what originally drew Mark to agribusiness and investment banking within the emerging markets in the first place – the sheer complexity of the asset class and how intellectually interesting it was. There are some people who seek the harder problem simply for the challenge and the rigor required to solve them – Mark is one of these people. The harder the problem, the happier he is.

Have a listen as Mark talks about the fog and friction of war is very much something you have to contend with in the business sector, especially if you’re operating in the emerging markets.

Episode 10 – Chris Rawley (USN) – Harvest Returns

Vets In Ag Podcast
Vets In Ag Podcast
Episode 10 - Chris Rawley (USN) - Harvest Returns
Loading
/

“The good thing was we didn’t know a lot about this field. The bad thing was we didn’t know a lot about this field.”

This from Chris Rawley, CEO for Harvest Returns, as he describes what it was like to start something as new as an equity crowdfunding company in an industry as disaggregated and specialized as agriculture.

Harvest Returns is an equity crowdfunding investment platform connecting both accredited and non-accredited investors with growers looking to raise capital. To date, they’ve raised over $10M for more than 20 different companies across the world – from livestock, specialty and permanent crops, indoor ag to row crops and artificial intelligence-driven ag technologies.

Chris and I have known each other for a number of years, in fact, we got started about the same time, both AGD Consulting and Harvest Returns, back in 2016. I had just returned from a 6-month, 6-country due diligence trip in Latin America and was keenly interested in what Harvest Returns was pursuing in the specialty crop space in Central America.

As we have supported and watched them grow over the years, I’m continually impressed with Chris’s vision for Harvest Returns – not just what they are doing now, but for the kinds of products they can create. I’ve never seen Chris static; he’s always thinking of new ways to innovate and solve increasingly complex problems within ag finance. The fact that they’ve nearly bootstrapped their entire company’s development, which for me as a veteran entrepreneur who has bootstrapped our own firm, gives me a tremendous sense of pride in what the veteran community is capable of.

Chris has been in the Navy for over 30 years now and in every clime and place he’s served, including the deserts of the Middle East and Afghanistan, he’s managed to see agriculture as an integral part of life, national security, and economic development.

Have a listen as Chris describes the veteran’s unique perspective around risk identification and management, distributed command and control, and remote work and what that means in today’s world.

Categories
Agricultural Investing Argentina Articles South American Agriculture Uncategorized Uruguay

Global Farmland Index/Prices – Savills World Research

A great report just released by Savills World Research last month describing the state of global farmland from 2012 to the present.  The report is based on data from 15 different world agricultural markets and is designed to provide comparative data on global farmland prices and market summaries.  Here a few highlights from the report

  •  The Global Farmland Index recorded an average annualised growth of 14.8% since 2002 and 6.6% over the past five years.

  • Farmland values are less volatile than other commodities and were significantly less affected by the credit crunch in 2008.

Global Farmland Index Graph

  • South America showed a 17.5% annualised growth since 2002.  The above graph shows South America was only outperformed in index growth by Central Europe; now facing extremely unstable times due to the Brexit.

  • The report describes an innovative way of benchmarking farmland prices to account for regional variables or more specifically investment spend relative to output by determining the cost of acquiring land in order to grow a tonne of wheat. Our ‘land cost for wheat production’ league (Figure 3 below) takes the average value of farmland in 2015 and divides it by the average harvest wheat yield over seven years (2008 to 2014). By taking a seven year period it allows for any weather fluctuations to be accounted for.

Cost of Land Graph

  • Note that Uruguay and Argentina have some of the lowest costs of land per tonne of wheat values.

  • Investor interest and demand to diversify investment portfolio’s will remain strong. Farmland performance tends to be counter-cyclical to other assets

Bottom Line to Investors

  • Agriculture is a long term investment to iron out volatility.

  • Diversify your portfolio to spread risk across different regions

  • Due diligence, especially with a range of cultures, political administrations, ownership structures, tax regimes, foreign investment regulations, is essential to understand global markets.

  • The right asset in the right market will yield positive returns for the investor in the long term.

Categories
South American Agriculture Uncategorized Uruguay

The South America Crop Report for April 10, 2016 – FarmsUY

In March, China imported 13,998 tons of Uruguayan beef, a 10% increase over the same month in 2015 and one of the best months in history.

Source: The South America Crop Report for April 10, 2016 – FarmsUY