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EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
Summary
� Strong long term fundamentals driven by rising and wealthier population, increasing protein consumption and biofuels demand combined with supply constrains fueled by decreasing land and water availability
� Farmland investments have attractive risk / return features with stable cur-rent income from agricultural production and upside from land appreciation
� Unique, secure add-on to real estate investments - appropriate in envi-ronment of economic and political uncertainty, financial market crisis and rising long term inflationary pressures
� Fund will invest in countries with limited political risk and leverage on re-gions (“low cost producers”) that will likely benefit from global changes in the agriculture markets
� Globally diversified portfolio of row / permanent crop farmland and dairy farm investments. Large diversification by manager, production, geogra-phy and style targeting IRR of 8-10%
� Ideal timing: There are only a limited number of attractive, investable farm-land assets and credible, experienced asset managers – these are more accessible now and at better terms
Global Farmland Fund
September 2009
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EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
Why invest in farmland?
� Excellent returns with enhanced portfolio diversification and quality:
o Annual returns for farmland investments historically between 7% – 9%
o Low historical correlation with other asset classes
o Increases returns of overall portfolio while reducing risk
o Inflation hedge – wealth preservation
o Tangible investment that provides real assets: land and commodities
Historical asset class risk/return profile Farmland correlation with other asset classes
0,22
(0,10)
(0,46)
0,54
(0,6) (0,4) (0,2) 0,0 0,2 0,4 0,6
Real Estate
Stocks
Bonds
Inflation
Note: Relating t US market between 1945 and 2006 Source: Journal of real estate portfolio management, Nov 05
Source: Ibbotson, NCREIF, S&P500, David Parst
� Long term commodities prices increase driven by economic fundamentals
o On the demand side, rising and wealthier population
o Increasing protein consumption and biofuels demand
o On the supply side, decreasing land availability and productivity
o Water-driven supply constraints and rising input costs
o Global warming / extreme weather events
Global wheat and corn consumption Per capita arable land and water availability
1000
1300
1600
1900
2200
1980 1985 1990 1995 2000 2005 2008
0%
10%
20%
30%
40%
50%
World consumption
World stocks
0,0
0,2
0,4
0,6
1950 1970 1990 2010 2030
0
25
50
75
100
Arable land per capita
Water avail. per capita
Source: USDA, 2009 Source: Faostat, WHO, 2008
Cash
US Treasury
Bonds
Commodities
US Equity
Farmland
Real Estate
0%
3%
6%
9%
12%
15%
18%
2% 4% 6% 8% 10% 12% 14%Annual Return
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EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
Global Farmland Fund maximizes exposure to investment case
� Returns strategy based on commodity
price increases, productivity enhance-
ments, and capital appreciation of un-
derlying farmland assets
� Vehicle can be set up to mimic bond-
like investment with annual dividends
between 4% and 6% from year one
� Direct investments in farmland combine high exposure to investment case with reduced
correlation to markets and commodities volatility
� Investments selected on basis of macro agriculture trends, countries´ comparative ad-
vantages and tested operational management models
� Initial focus in USA & Canada, Australia, New Zealand and Brazil/Argentina to limit po-
litical/sovereign risk and leverage on regions that will likely benefit from global changes
in the agriculture markets
� Potential for not accounted additional cash flows from carbon markets and environ-
mental related services
Brazil
� Large domestic market and solid export record
� Large agricultural markets, with room for yield
improvements
Australia
� Near large, rapid growth Asian markets
� Broad, technologically advanced agricultural
markets
New Zealand
� Solid export record and near Asian markets
� Relatively small agricultural market base, but
very efficient
USA & Canada
� Very large and efficient agricultural sector
� Solid export record and good access to Asian
markets
Brazil
� Large domestic market and solid export record
� Large agricultural markets, with room for yield
improvements
Australia
� Near large, rapid growth Asian markets
� Broad, technologically advanced agricultural
markets
New Zealand
� Solid export record and near Asian markets
� Relatively small agricultural market base, but
very efficient
USA & Canada
� Very large and efficient agricultural sector
� Solid export record and good access to Asian
markets
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EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
Solid and tested investment strategy and service
� Fund with tailored portfolio of managed accounts, top-tier funds and select co-investments
� Globally diversified portfolio of row / permanent crop farmland and dairy farm invest-ments. Large diversification by manager, production, geography and style
Funds /
M anaged
Account.
80%
Direct Co-
Invest. a)
20% Row
Crops
40%
Dairy and
M eat
30%
Perman.
Crops
30%
North
America
40%
Australia
and New
Zealand
40%
South
America
20%
� Early-mover advantage and EBG Capital’s network / local partner insight to capture unique investment opportunities and better information
� EBGC’s flexible and hands-on approach enables to take advantage of regional opportu-nities, attractive entry pricing and turn around situations
� Range of farmland operating models: rent from farmers, rent + % farmer revenue and self-operated
� Preference for low leverage at fund level
� Manage downside risk by employing environmentally-benign integrated farm manage-ment techniques and social standards
� Local investment managers selected based on deliberate, methodical and rigorous in-vestment process with multi-party on-site due diligence and monitoring
� Strategic and tactical asset alloca-tion, as well as structure, may be geared to fit specific investor prefer-ences
� EBGC’s approach allows to compare wide range of transactions, act op-portunistically and build fully diversi-fied portfolio
� Superior monitoring and reporting services based on sector best prac-tices
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EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
Terms
Target Return: USD 8-10 % p.a.
Size & Term: Target USD 100 - 350 Mio. 8 years, extension 2 + 1 year
Closing: 1st closing [ ] December 09, 2nd closing [ ] March 10
Fees: up to 2 % Management Fee; 10% Performance Fee above 6%, HWM
Fund Domicile: [tbd]
Advisory Board: Comprising major investors
Additional Provisions: Key man provision
Reporting: Annual audited accounts, quarterly manager report
EBG Capital provides unique cross-disciplinary expertise, insight and rela-tionships needed to create alpha in environmental markets
� Highly experienced team of five senior professionals with background in agriculture, al-
ternative investments, corporate finance and commodities research
� Team “was there” long before the space got hot, with decades of experience in envi-
ronmental finance and sustainability globally, and a profound knowledge of agriculture,
timber and carbon
� Outstanding global network including scientists, supranational organizations, sector ex-
perts, PE funds and investors -- utilized for deal sourcing, privileged manager access
and extremely rigorous diligence
Expertise Experience Network Commitment
Long term economic
fundamentals
Post downturn investment
trends
Environmental markets
specificities
MASDAR CleantechFund (US$ 250m)
September 2006
Strategic Collaboration Cleantech Group
October 2007
Partnership AgreementGold Carbon Fund
January 2008
Partnership Agreement Global Farmland Fund
April 2009
EBG CapitalEBG CapitalEBG CapitalEBG Capital
Partnership Agreement Global Timber Fund
June 2009
EBG CapitalEBG CapitalEBG CapitalEBG Capital
Cutting-edge, tailored alternative investment solutions
in the environmental space
Expertise Experience Network Commitment
Long term economic
fundamentals
Post downturn investment
trends
Environmental markets
specificities
MASDAR CleantechFund (US$ 250m)
September 2006
MASDAR CleantechFund (US$ 250m)
September 2006
Strategic Collaboration Cleantech Group
October 2007
Strategic Collaboration Cleantech Group
October 2007
Partnership AgreementGold Carbon Fund
January 2008
Partnership AgreementGold Carbon Fund
January 2008
Partnership Agreement Global Farmland Fund
April 2009
EBG CapitalEBG CapitalEBG CapitalEBG Capital
Partnership Agreement Global Farmland Fund
April 2009
EBG CapitalEBG CapitalEBG CapitalEBG Capital
Partnership Agreement Global Timber Fund
June 2009
EBG CapitalEBG CapitalEBG CapitalEBG Capital
Partnership Agreement Global Timber Fund
June 2009
EBG CapitalEBG CapitalEBG CapitalEBG Capital
Cutting-edge, tailored alternative investment solutions
in the environmental space
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EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
EBG CapitalEBG CapitalEBG CapitalEBG CapitalEnvironmental Investments
Contact
EBG Capital AG, Lavaterstrasse 40, CH-8002 Zurich, Switzerland
Ralph Kretschmer Dr. Bernd Schanzenbächer
Managing Partner Managing Partner
Ralph.kretschmer@ebg-capital.com bernd.schanzenbaecher@ebg-capital.com
+ 41 44 586 05 35 + 41 44 586 63 72
Important Legal Information - Disclaimer
This document was produced by EBG Capital and is for information purposes only. It is not intended as investment advice and under no cir-
cumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy, any security or a recommendation to buy or sell
any security. EBG Capital makes no representation or warranty, express or implied, as to the accuracy or completeness of the information con-
tained herein and shall not have any liability for the information contained in, or any omissions from, this document. Neither this document nor
any copy thereof may be sent or taken into the United States, or distributed in the United States or to any U.S. person.