The burgeoning agricultural investment market and the expanding potential for growth and new contributors in the industry were a main focus of the fifth annual Global AgInvesting conference at the Waldorf Astoria Hotel in New York City.
Investors, asset managers and agribusiness industry executives gathered the first week of May to hear and share information. Participants represented more than $2.5 trillion in assets under management and represented 35 countries. They learned more about agricultural investment opportunities, the challenges to committing capital to the sector and where the real money is moving into the space.
One highlight was a panel discussion on the potential of investing in African agriculture and the many challenges in the region, such as 90 percent of small stakeholder growers having a small amount of land, imposing Western practices before developing an understanding of local conditions, and the difficulties of introducing modern technology and equipment to develop the land.
“It is the process of breaking down these risks, identifying them and evaluating them to level the playing field that is important,” said Jon Vandenheuvel, president and co-founder of Africa Atlantic Holdings Ltd., a company that is establishing a non-profit Agribusiness Knowledge Center at Lake Volta, Ghana, West Africa. “One may understand ag investing, but ag investing in Africa is different.”
More than 85 international industry experts provided information about ag investing around the world, including Bluford Putnam, chief economist at CME Group, Randall Pope, CEO at Westchester Group, an affiliate of TIAA-CREF, and Tim Hornibrook, co-head of Macquarie Agricultural Funds Management, who covered liquid and illiquid investment strategies, regional risk and return profiles, agricultural technology opportunities and animal protein demand and drivers.
Philippe de Lapérouse, managing director of HighQuest Partners and chair of the conference added, “There are many reasons for investors to increase their exposure to agriculture including, but not limited to, the fact that it provides an opportunity to diversify portfolios as well as participate at an early stage in the industrialization of emerging economies as agricultural development has historically preceded industrial development.”
Water management issues and water investment strategies were addressed at the event as well, given the fact that over the next 20 years the limiting factor in meeting the needs of the growing population–9 billion people by 2050–may very well be the availability of water and not land.
“People underestimate the risk [with water management]. There are operational, environmental, litigation and judicial uncertainties,” said Disque Deane, Jr., CIO and co-founder Water Asset Management in New York, who recommended investing in high-quality irrigated farmland with access to assured water rights and then working with the relevant authorities to implement strategies.
Over 200 attendees from the main conference also participated in the newly-added GAI Ag Tech Investment Summit on Thurs., May 2. Through discussions with veteran investors in the space, this full-day session addressed the process of raising capital through traditional avenues, conducting due diligence on portfolio companies, identifying which technologies show the most promise for addressing grower needs and how to structure exits for portfolio companies.
“Agriculture investing is not just an inflation hedge through buying farm land–new technologies are transforming both the capital value as well as the sustainability of ag land,” said Arama Kukutai, managing director and co-founder of a leading ag venture capital firm, Finistere Ventures.
Since 2009, Global AgInvesting has hosted ag investing conferences around the world, with the New York conference being the flagship. The next event in its agriculture investment conference series will be in Singapore, Sept. 24-16, 2013, at the Marina Bay Sands Hotel. More details are at: http://www.globalaginvesting.com/.