November 26, 2019

This article will be featured in the GAI Gazette, Volume 6, Issue 4, along with other articles addressing agriculture investment opportunities and surrounding themes. The magazine will be distributed in conjunction with the annual Global AgInvesting Europe event, to be held in London on 9-10 December 2019.

Join us in London to hear valuable insight and best practices from the expert speaking faculty, and network with key investors and innovators in the sector. Learn more and register.

Below is the continuation of Part I of Building the GAI Community: A Decade of Progress

By Michelle Pelletier Marshall, GAI Media     

6.) 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 changed dramatically.

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. 

7.) Moving forward, what are the newest things attendees can expect to see at GAI? (Please see sidebar as well.)

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 consistently each 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.

8.) 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 (through different companies) every year since I left  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 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 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.”

SIDEBAR: 

The Future of GAI

The current managing directors of Global AgInvesting are Kate Westfall and Jared Rose. GAI Gazette asked them to weigh in on the journey of GAI:

1.) At this 10^th anniversary of Global AgInvesting Europe, what are your reflections on the history and success of the event? What does the future hold for GAI?

JR: Global AgInvesting, since its inception in 2009 with the New York event, has been committed to educating the institutional investing and private wealth management communities on the compelling nature of agriculture investments, while providing opportunity for immersion into the marketplace. It has been an honor for all of us at Global AgInvesting to have spent the last decade breathing life into a nascent asset class. The Global AgInvesting platform has always been, and continues to be, essential for giving voice and shape to an evolutionary asset class. What has emerged is a potent critical catalyst for accelerating growth in the space.

Asset classes such as real estate, timber, hedge funds and others that are commonly found today inside institutional portfolios did not feature at all 20, 30, or 40 years ago. Agriculture as an asset class is on a similar path as these other asset classes, to become an established component of sophisticated institutional investors’ asset allocations. Despite the tremendous progress that has been made and the strength of future opportunity, agriculture today remains notably underinvested by institutional investors. Those investing in agriculture today are still pioneers. At some point in the coming years, the institutional herd effect will settle in and a bumper crop of new investors will be on the scene. We are not there yet and it might take many years, but this will happen. Agriculture as an asset class will emerge from adolescence to maturity. This is the future for Global AgInvesting – to fulfill that promise.

KW: The fact that we have played a significant role in advancing an asset class that I am so personally committed to makes the work incredibly rewarding. The community that we are building and the network of investors who recognize the opportunity feels much more convivial than typical investment conferences. This is a sentiment that I have heard over and over from many of our long-time attendees, and I see that as a real value-add along with the consistently critical content and meaningful networking opportunities. I also echo Jared’s comments about this being the very beginning. All of the champions of the sector who have been with us since 2009 have collectively built a strong foundation on which to build the future, solidifying agriculture as a legitimate asset class.

Moving forward, we are seeing a resurgence in appetite for sustainability and traceability. Impact investments are taking the spotlight more and more, and this sector is poised to benefit. Something inherent in the human connection to and need for food and agriculture offers the feeling of “doing good while doing well” when responsibly investing in the space. An increasing number of sector-focused asset managers will no doubt take on the mantle and deliver opportunities with triple bottom line appeal.

Another area that I am really passionate about is the agtech space. My ag investment career began with agtech back when GAI was first getting off the ground. I was one of the producers of the very first agtech investment conference, Agriculture 2.0, and I am so excited to continue that work under the GAI umbrella. With our AgTech Nexus series and future innovation events on the horizon, I look forward to bringing all of the successful elements of GAI events and tailoring them to the agtech, food tech, and venture capital communities committed to building a more sustainable future.

I am really proud of the events that we have produced so far, and look forward to trying to top the experience every time in every market. Here’s to 10 more!

2.) What are the top three presentations attendees shouldn’t miss here in London at the 10^th anniversary of Global AgInvesting Europe?

Jared Rose:

– Reflections on a Decade of European Agriculture Investment

– The Role of Farmland in an Institutional Portfolio and Why Now is the Right Time to Invest

– Consumer Driven Megatrends and their Implications on Agriculture Investment

Kate Westfall:

– Finding Opportunity in Food Waste

– Making the Investment Case for Regenerative Agriculture

– Going Beyond ESG Integration

Learn more and register for Global AgInvesting Europe.

~ Michelle Pelletier Marshall is managing editor for Global AgInvesting’s quarterly GAI Gazette magazine and an occasional contributor to GAI News. She can be reached at mmarshall@globalaginvesting.com.