International investment in agriculture increasing
While the global agriculture investment sector experienced continued growth in 2012, allocations of capital to the sector continue to remain below the industry’s needs and potential.
The Food and Agriculture Organization of the United Nations predicts that agriculture production will have to expand 70 percent by 2050 to meet global demand, requiring an annual net investment in developing countries of more than $83 billion.
In addition to growing concerns over food security, which is a fundamental driver for investment in the sector, farmland is an attractive long-term investment as it provides an opportunity to hedge against inflation and is negatively correlated to stock markets.
The Global AgInvesting (www.globalaginvesting.com) conference series hosted over 1,400 attendees in 2012, including current allocators to the agriculture sector as well as investors just beginning to evaluate the asset class, representing a 40 percent increase in attendance over 2011. Close to 500 investors from institutions with more than $3.5 trillion in total assets under management as well as farm and fund managers with more than 25 million acres of farmland under management attended the New York, Singapore and London events. This suggests a burgeoning interest in agriculture as an asset class from both institutional investors as well as the financial industry as a whole.
Global AgInvesting (GAI) is starting 2013 at the InterContinental Abu Dhabi with its inaugural GAI Middle East conference (February 25-27) where the focus will be on practical solutions for addressing food security priorities in the MENA region, including outsourcing strategies and implementation of technological advances. HighQuest Partners (www.highquestpartners.com), a global food and agricultural strategic advisory firm, is hosting the event in conjunction with the Food Security Center of Abu Dhabi.
“Food security is a major issue in the Middle East and North Africa due to challenges such as regional water scarcity, reliance on imports to meet food demand and demographic pressures,” said Philippe de Lapérouse of HighQuest Partners. “Our first GAI Middle East conference will provide insights and networking opportunities for strategic investors, and family offices and Sovereign Wealth Funds in the region which are interested in financing projects that will address these food security challenges.”
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