Preliminary Reaction to Global Aginvesting 2011

This week I attended Global AgInvesting 2011 in New York City at the Waldorf=Astoria building.

(emphasis mine) [my comment]

Global AgInvesting 2011

Agriculture represents an emerging asset class for private and institutional investors. After decades of underinvestment in the sector, institutional and private capital is being attracted by the combination of exceptionally strong fundamentals, inflation hedging, and low correlation with other asset classes.

Global AgInvesting 2011 will bring together leading global ag-sector end-investors, ag-managers, academics, policy experts and agribusiness industry executives to explore the opportunities and challenges of investing in agriculture.

The fundamentals of agriculture are compelling. A growing world population, improving diets in the developing world, and alternative fuel/industrial applications will continue to drive demand. Meeting this demand … would require more land than can be sustainably and economically brought into production globally. This will result in high crop prices and drive profitability and valuations across the sector over the coming decade.

However, developing an agricultural investment program within the global ag sector is complex.
Investors face myriad choices about where and how to invest, and challenges identifying and evaluating the best managers.

Global AgInvesting 2011 will help end investors understand the different strategies and the different exposures within the ag space. Investors will learn about different geographies and strategies, across illiquid investment vehicles (farmland, infrastructure and ag private equity), as well as liquid [and potentially dangerous] investment vehicle alternatives such as ag focused hedge funds, ag equities and ag commodities.

Key Speakers Include:

Mariano Bosch, CEO, Adecoagro
Dale Hunt, Managing Director, Equities, Ascension Health
Angus Selby, Principal, Altima Partners
Craig Tashjian, Principal, Amerra Capital Management
Claudio Moretti, Partner, Baker & McKenzie
Harald Brunckhorst, CEO, Bunge Asset Management, Ltd.
Ken Van Heel, Global Director, Dow Chemical Company Pension Fund
Marshall Thomas, Director, Farm & Forestry Management Services
Renatto Barbieri, Portfolio Manager, Galtere, Ltd.
Jeffrey Conrad, President, Hancock Agricultural Investment Group
Hunt Stookey, Managing Director & Partner, HighQuest Partners
Martin Davies, Head of Farmland Investments, Insight Investment Management
Charlie McNairy, Managing Partner, International Farming Corporation
Tim Hornibrook, Co-Head, Macquarie Agricultural Funds Management
Mark Zenuk, Managing Director, NGP Global Adaptation Partners
William Wilson, Professor of Agribusiness and Economics, North Dakota State University
Matthew Powell, Manager, Ospraie Management, LLC
Kevin Schwartz, Partner, Paine & Partners
Eric Haskel, Managing Director, Perella Weinberg Partners
Jose Minaya, Managing Director, Head of Natural Resources and Infrastructure Investments, TIAA-CREF
Mary Law, Investment Officer, Wake Forest University

To view a list of attending companies, click here.

My reaction:  Here is a list of my preliminary reactions to Global Aginvesting 2011.

—  Global Aginvesting 2011 was a big success (the May 2 Pre-Conference Short Course in Ag Fundamentals was sold out).  Any more attendees and seating might have become a real problem (we were using extra chairs as it was).

—  The conference was well organized, and the setting was extremely pleasant.  The Waldorf=Astoria is a beautiful building.

—  The conference' s speakers covered an enormous quantity of valuable (and some problematic) information about the agricultural sector.

—  It was interesting to see how Ag Investments are marketed to institutional investors.

—  It was very useful in seeing the average level of awareness of what is going in the agricultural sector (which is incomplete or incorrect in some key areas).

—  The South American panel did the best job, with a strong pitch for investments in South American farmland.

—  The Russia panel was the most unconvincing, making a poor case for investing in Russian farmland.  I am not too unhappy about this because it means that Russian farmland will remain at attractive prices for the near future.

—  The best speaker was probably Julio Bestani (from panel on South American Farmland), who covered topics no else mentioned, such as the growing world water scarcity and Desertification.

—  The pro-GM forces were overwhelming represented at the conference.  None of the speakers mentioned anything critical of GM (only a few attendees raised some issues).

—  I had “issues” with some of the presentations (factors adversely affecting world food productions went largely unmentioned, GM' s potential future benefits being highly exaggerated, etc).

—  Investments I consider unsafe were pitched without any warning about counterparty risks (see AIGFP' s Massive Short Position In Commodities for an example of the type of dangerous investments being peddled to institutional investors.)
—  Topics that weren' t covered or given the attention they deserve:

—————  The enormous counterparty risks of the investments being pitched
—————  The growing world water scarcity
—————  Desertification
—————  Potential issues with the use of GM crops
—————  The attractive of Russian farmland (again, happy about this one)

—  The danger of rapid (hyper) inflation or a dollar collapse was not discussed.

—  The accuracy of USDA estimates was not discussed (although the farm operators I talked to ridiculed them).

Conclusion:  Global Aginvesting 2011 has given me a lot of material to write about.

Sidenote About GM Crops

Although I have never considered myself a GM opponent and have a cousin who works as a scientist in the industry (not for Monsanto), I have been reading troubling things.  I will write more about the subject after talking to my cousin.

This entry was posted in Attractive_Investments, Food_Crisis, Important_Announcement. Bookmark the permalink.

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