March 5, 2018

This is part two of a conversation with the founders of the GAI conference series Greg Mellinger, CEO of HighQuest Group; Philippe de Lapérouse, managing director and head of HighQuest Consulting; Chris Erickson, currently president of Parsonage Lane Advisors and formerly managing director with HighQuest; Hunt Stookey, presently director of research and investment strategy at Ceres Partners LLC, and previously managing director at HighQuest; and Michael Whitehead, ANZ Bank, Agribusiness Research/ANZ Client Insights & Solutions (CIS) of Australia, who was a collaborator for the inaugural event, and one of its first speakers.

The first Global AgInvesting (GAI) conference took place in New York City in June 2009 as a meeting to educate the allocators and to begin the work of building a network of sector-focused professionals, managers, and experts with the goal of establishing agriculture as a distinct asset class. Due to overwhelmingly positive response, the event has since expanded internationally, with close to 30 events in the last 10 years in New York, Geneva, London, Abu Dhabi, Dubai, Singapore, and Tokyo.

As Global AgInvesting celebrates its 10th anniversary event this spring, we thought it apropos to reach out to the founders to learn more about its creation, mission, and future direction. Read Part One here.

What do you see at the biggest shift(s) in ag investing since the founding of GAI?

PDL: We’ve seen attendees become more sophisticated and more knowledgeable in the sector, and more actively allocating into the sector. We’ve seen a shift in interest to include a broader range of investment opportunities in production in farmland, not just row crops, but permanent and specialty crops, which presumes taking on more operating risk. We’ve also seen increased interest in investing in offshore locations, such as in Brazil, Uruguay, Paraguay, and Argentina, as well as opportunities in Southeast Asia.

GM: The biggest shift has been the proliferation of non-farmland options for investment, liquid and illiquid – private equity, infrastructure, commodity funds and of course, agtech. The other thing is that there have been a lot of allocations made over the past 10 years, and the investor base has expanded dramatically, especially in the last two years there have been record numbers of brand new investors attending.

The other shift has been because of how much education and expertise the market is obtaining right now, there’s a much greater appreciation of fiduciaries, whether it’s organics, tea plantations, or coffee. In the early days, everyone was heavily focused on corn, soybeans, wheat, or palm oil, and now the number of crops has multiplied dramatically to include indoor farming, fresh fruit and vegetables, grapes, nuts, animal proteins. The crop types and niche nature of the crop types – whether it be in farmland or private equity – has really dramatically changed.

PDL: There’s also much more interest in sustainability on the part of all investors. It used to be a check-off on the due diligence list but now we see that sustainability has really become a core driver/key element of investment in agriculture, and we see that on the part of impact investors, family offices, and more.

MW: The biggest shift is clearly the growth of the class – ag has gone from being a very risky and very out in left field alternative investment class to one that, whilst it’s not your central focus ‘blue chip’, it’s very much an accepted asset class and open to all classes of investment now. The other big thing that’s happened in ag is that we’ve reached a point where consolidation in companies or acquisition of agricultural production land has meant that investors are seeing the potential for a scarcity of assets. So the number of options are getting less and less and that changes the way ag investing goes.

The other fantastic thing is that in the short space of 10 years, technology advances have provided the potential for really exciting, new large-scale agriculture technology developments – horticulture, meat processing, etc. – and there are efficiencies there like never before, and supply chains have changed. The shift is that just as investment has discovered agriculture, ag is about to fundamentally change, almost more than the Green Revolution.

Moving forward, what are the newest things attendees can expect to see at GAI? 

CE: GAI has become the meeting place for the industry, and I think it’s going to continue in that way. The GAI team does not rest on its laurels; they’ve been very innovative in including different trends and different topics so that the event stays relevant.

The most fascinating aspect about GAI has been, not only the size of the event and how it has grown to consistently over 600 people a year, but the fact that it’s not just a conference that draws people from the U.S., it draws people from all over the world. This is truly a diverse group that is examining global issues.

GM: One of the incredible value adds is that it [GAI] is an incredibly efficient and effective networking environment where the power brokers and the real movers and shakers on the asset deployment side and the buy side and the sell side are getting together. It’s not necessarily what’s new, it’s that we are going to remain committed to making sure that this is the place to be and be seen in order to conduct business in ag investing. That’s the big value proposition.

From your point of view, as someone in the industry and not a HighQuest employee, what is the value of GAI?

HS: My organization has been a sponsor every year since I left (through different companies) HighQuest. We absolutely see the value in the investors who are there, and catching up with our peers and keeping track of what’s going on in the space in a way that we couldn’t do any other way as easily. We have been a sponsor, speaker, and participant because we see real value in maintaining our brand in this space – both among our peers and among our potential investors – within this forum.

MW: Global AgInvesting was a ground-breaker in the early days because it was just about the first of its kind; now there are lots of ag investing conferences, but what Global AgInvesting has always done and succeeds in doing, and why I go to it and very few of the others, is that you know at Global AgInvesting you are going to get debate and facts because the team that puts it together go out of their way to make sure that people [speakers] don’t just advertise what they are doing. There have been some quite vigorous, but very good natured disagreement on things at GAI conferences, and it’s good to see that there are people passionately defending their different opinions and hypotheses in agriculture. For the attendees, with trillions of dollars of assets under management sitting in the room, they want to be able to hear every single opinion so they can make the best judgment for investing their dollars in agriculture. It’s very important to keep the debate going.

The other thing is the caliber of the attendees – one of the things people go to events for is that they can meet people either they can do business with, or they can learn from or they can make introductions to, and nowhere else has the caliber of attendees or the scale. GAI works really hard to make sure that it is value for time and value for money for everybody there. That is why I tell everybody I work with in the sector – whether it’s companies, investors, across the board – if you get the chance, go to one of the Global AgInvesting events, particularly the New York one because you will learn so much from it, meet so many people there, be able to ask so many questions, and get exposed to so much globally in the one place. I’m not saying that just because I was there from the start. I have yet to meet anybody who has come away from a Global AgInvesting event who hasn’t said “yup, I really got lots out of that.”

By Michelle Pelletier Marshall, GAI Media

Next: An interview with GAI Managing Directors Jared Rose and Kate Westfall