Global AgInvesting Asia 2011

Conference Proceedings

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Monday, 5 December 2011

Pre-Conference Seminar: Short Course in Ag Fundamentals

(ADDITIONAL REGISTRATION REQUIRED)

13:30-14:15 – Agriculture as an Emerging Asset Class
Philippe d e Lapérouse, Managing Director, HighQuest Partners

14:15-15:00 – International Farmland Market Analysis
Henry Wilkes, CEO, InvestAg Savills

15:00-15:30 – Coffee Break

15:30-16:15 – Water Resources
Mahendra Shah, Food Security Advisor and Director of International Planning, Aquiess and former Senior Policy Advisor, Qatar National Food Security Programme

16:15-17:00 – Short Course Question & Answer Session
Our three lecturers will hold a joint Q&A which will allow for discussion among the lecturers as well as with the audience.

17:00-18:00 – Cocktail Reception (for all attendees)

Tuesday, 6 December 2011

8:15-9:00 – Conference Registration

9:00-9:45 – Opening Remarks – Investing in Agriculture
Philippe de Lapérouse, Managing Director, HighQuest Partners

What is the current status of agriculture as an asset class and what have been the major developments within the past year?
How should investors think about the different exposures (both liquid and illiquid) when developing their agriculture portfolio? What are the choices and what are the associated risk/return trade offs they must consider?

9:45-10:45 – PANEL: End Investor Perspectives on Agriculture Investing
Moderator:
Desmond Sheehy, Chief Investment Officer, Duxton Asset Management

Panelist:
Francisco Lobo de Vasconcellos, Investment Director - Agribusiness, Norfund
lu-Jin Ong, Chief Executive Officer, Deauville Private Office Pte Ltd
Vipul Prakash, Global Head, Agribusiness & Forestry, International Finance Corporation (IFC)

A panel of leading global institutional investors and family office investors in the ag space will discuss their experiences investing in this emerging asset class.

How do agriculture investments fit within the broader portfolio?
How was the decision made to include agriculture investments in the portfolio and what research process was employed to support this decision?
How have end investors addressed and weighed different strategies regarding sub-allocation within the ag space in both liquid and illiquid vehicles?
What processes have been successfully implemented in order to identify and select fund managers? How should one undertake due diligence of a farm operator?

10:45-11:15 – Coffee Break

11:15-12:15 – PANEL: Where Are the Opportunities for Investment in Asian Agriculture?
Moderator:
Simon Hopkins, Chief Executive Officer, Milltrust International Group

Panelist:
Patrick Davenport, Partner, Audax Capital Limited
David Do, Managing Director, Vietnam Investments
Ananda Falisse, Managing Director, Timor Trade Pte Ltd
Joseph Lacson, Partner & Chief Investment Officer, Frontier Investment & Development Partners

Agricultural production in Asia is undertaken in a wider range of climatic zones and produces a wider variety of crops and animal protein production systems compared to other regions in the world. Ranging from temperate zones of the Russian Far East and northern eastern provinces of China to the tropical regions of Oceania and South East Asia to the temperate zones in Australia and New Zealand, Asia offers great opportunities and challenges for investors. Equally important, demand in Asia for tropical oils, oilseed products, grains and animal protein (including aquaculture) is a principal driver of global demand in the ag sector. Our panelists will highlight opportunities for investment across the region including farmland, infrastructure plays and value-added downstream processing situations.

Which countries present attractive opportunities for investment in terms of risks (political, social, financial and environmental)?
How do investment opportunities in Asian agriculture differ from those in other regions?
What are the key drivers from growth in the agricultural sector in Asia?
How do deals get consummated in Asia and how does this differ from other regions of the world?

12:15-13:15 - Liquid Ag Investing Strategies
Moderator:
Greg Smith, Executive Director, Global Commodities Limited

Panelists:
Liam Pepper, Vice President, Agri Commodities, JP Morgan
Lionel Semonin, Managing Director and Portfolio Manager, Four Elements Capital
Scott Weldon, Director, Head of Strategy and Research, Duxton Asset Management

Liquid ag strategies such as publicly listed ag equities, commodity future index funds, ag focused hedge funds and ag lending strategies provide investors with a more traditional exposure to the ag theme. Liquid investment in ag requires the same focus and specialization as illiquid investment strategies. Hear from leading managers about the opportunities in this segment of the market.

What are the different liquid strategies available to end investors?
How do these strategies relate to the illiquid strategies – in particular farmland where values are determined by cash returns generated by crops?
What issues should end investors consider when contemplating the inclusion of liquid strategies within their ag portfolio?

13:15-14:30 – Networking Lunch

14:30-15:30 – PANEL: Australia and New Zealand Farmland
Moderator:
Hans-Willem van Tuyll, Independent Advisor

Panelists:
Edouard Peter, Chief Executive Officer, Duxton Asset Management
Detlef Schoen, Managing Partner, Aquila Capital Green Assets GmbH
Andrew Sliper, Head of Asia, Macquarie Agricultural Funds Management
Stephen Williams, Director, Saltbush Capital Markets

Given their location in temperate growing zones and their geographic proximity to fast-growing markets in Asia, particularly China and India, Australia and New Zealand are well-positioned to compete with other major origins to supply growing demand for oilseeds, grains and animal protein throughout Asia. In addition, producers and participants in downstream activities operate on the same scale and level of sophistication as competitors in other major origins (the U.S, Brazil and Argentina, etc.). A number of funds which have been operating in the region have recently raised new rounds of financing to invest in the sector.

Where are the opportunities to generate sustainable margins in value chain in both markets, particularly regarding grain and livestock production
Why should both Australia and New Zealand be represented in a diversified ag portfolio?
What type of investment vehicles provide attractive options for exposure to the ag sector in both countries?

15:30-16:30 – PANEL: Ag Private Equity
Moderator:
Yinglan Tan, Head of Projects, National Research Foundation, Prime Minister's Office Singapore

Panelists:
Kevin Schwartz, Partner, Paine & Partners, LLC
Jason Silm, Head of Agriculture Fund Management, VTB Capital
Rajesh Srivistava, Chairman and Managing Director, Rabo Equity Advisors

The predominant focus amongst illiquid ag investment styles is acquiring farmland and engaging in production farming. At the same time, other managers are pursuing strategies which focus elsewhere in the sector - from seed technology to ag infrastructure/processing, and protein production. While these various strategies provide exposure to the ag theme, they provide very different risk and return profiles.

What are the different strategies being pursued by these managers?
What are the return expectations for these different strategies?
How do these strategies and the returns they are expected to provide compare with the farmland/farm operation strategies?

16:30-17:00 – Coffee Break

17:00-18:00 – PANEL: African Farmland
Moderator:
Philippe de Lapérouse, Managing Director, HighQuest Partners

Panelists:
Mark Gibson, Agricultural Development Economist and Agri-Consultant
Mahendra Shah, Food Security Advisor and Director of International Planning, Aquiess and former Senior Policy Advisor, Qatar National Food Security Programme
James Siggs, Director, MASDAR International Consultants

Africa, which accounts for a sizable percentage of the globe’s reserves of potential, rain-fed cropland, is expected to develop in to a bread basket to supply both domestic consumption and export markets. However, most of the continent has yet to employ modern agricultural production practices and lacks access to efficient processing facilities and transportation logistics systems. Local producers lack access to basic infrastructure, crop varieties optimized for local conditions and other tools commonly available in more developed regions. Despite these challenges, a handful of managers pioneering agricultural production in Africa believe that the returns outweigh the risks.

Which regions/countries within Africa and what sectors of the value chain represent the most attractive opportunities in Africa?
What are the particular challenges facing managers investing in Africa and what strategies and operating models have been successful in addressing them?
How are managers addressing issues concerning integration of smallholders with large-scale production agriculture?

18:00-19:00 – Cocktail Reception

Wednesday, 7 December 2011

8:30-9:00 – Continental Breakfast

9:00-10:00 – PANEL: Beyond Row Crops - Dairy, Livestock and Aquaculture
Moderator:
Hans-Willem van Tuyll, Independent Advisor

Panelists:
Gareth Lott, Founder and Chief Executive Officer, Aquanue
Detlef Schoen, Managing Partner, Aquila Capital Green Assets GmbH
Desmond Sheehy, Chief Investment Officer, Duxton Asset Management
Warren Taylor, Agribusiness Director, Greenfield Capital Advisors

While much of the current public and media focus on investing in agriculture centers on investments in farmland and infrastructure used to produce and store/transport major row crops (oilseeds and feed grains), institutional investors have also been financing permanent crops (nuts, stone fruits, vineyards) and animal protein (milk, meat, eggs and aquaculture) production over a long period. With increasing demand for more varied diets across the developed world and the dramatic shift from grain-based diets to animal protein consumption occurring in developing economies, opportunities for investing in non-row crop ventures are increasing and are attracting significant levels of investment capital. In Asia, growing demand from consumers in the region for fish protein is creating tremendous investment opportunities in aquaculture. Managers participating on this panel will discuss the robust investment programs they are pursuing in these sectors.

What are the fundamental drivers which are creating opportunities for investment in these sectors?
Why is now an attractive time to allocate capital to non-row crop investment opportunities, particularly aquaculture in Asia?
Why does an allocation to permanent crops or animal protein production(including aquaculture) make sense for a diversified portfolio?
What different operating models have they developed in order to realize attractive returns for their investors?
Which types of production and regions of the world present attractive opportunities for investment?
What additional items investors should consider when reviewing opportunities outside of row crops?
What will be the main drivers of returns over the next decade?

10:00-11:00 – PANEL: Investing in Palm Oil Production
Moderator:
Prasad Gopalan, Head, Agribusiness & Forestry, Asia, International Finance Corporation (IFC)

Panelists:
Rajesh Chopra , Chief Financial Officer, Mewah Group
Edgare Kerwijk, Managing Director, Asia Green Capital
Martin Rushworth, Senior Vice President, Felda Global Ventures

Palm oil (including palm kernel oil) accounts for the largest volume of vegetable oil produced (30% versus 23% for soybean oil) and the bulk of vegetable oil traded globally (60%). While palm oil production has been centered over the past half-century in Malaysia, Indonesia overtook Malaysia as the world’s largest producer of palm oil in 2006. With growing global demand for palm oil used in food applications, consumer products (soaps and health-beauty aids), industrial applications and biodiesel, expansion of palm plantations in Malaysia and more recently in Indonesia has led to widespread criticism of the industry by NGOs which in turn has resulted in the adoption of certification schemes validating sustainable production (Roundtable on Sustainable Palm Oil) by the industry including palm producers and other participants in the supply chain. Growing global demand for the products offers opportunities to invest in new palm plantations in Africa and Latin America. This expansion offers both opportunities and challenges for investors.

Where are the investment opportunities in palm oil geographically and across the supply chain?

Which companies are leaders in the industry and what are they doing to improve efficiencies in production?

How will certification schemes affect returns for investors?

What challenges does the industry face in order to present itself as an environmentally, economically and socially sustainable sector?

11:00-11:30 – Coffee Break

11:30-12:45 – PANEL: US and South American Farmland
Moderator:
Philippe de Lapérouse, Managing Director, HighQuest Partners

Panelists:
Joseph Carvin, Partner, Altima Partners
Daniel Hough, Agricultural Product Specialist, Macquarie Agricultural Funds Management
Stephen Kenney, Vice President - Business Development, Hancock Agricultural Investment Group
Hunt Stookey, Director, Agricultural Investments, AEW Capital Management

The US is the most mature market for farmland investment, with a history of institutional ownership dating to the 1980s. While it may not offer the higher risk and return potential as do opportunities in the developing world, the US still provides a very attractive opportunity for those investors seeking a specific risk/reward objective. Hear from a panel of managers with different strategies how they approach the US market.

Over the past few years, South American agriculture has attracted more capital inflow than any other region in the world. Agriculture conducted in South America increasingly operates on a massive scale, with individual farms comprising tens of thousands of hectares. While recent legislation in Brazil has effectively placed a moratorium on major foreign investment in that country and similar legislation being considered in Argentina and Uruguay, South America remains a diverse agricultural region offering a wide range of investment opportunities. Our panelists will discuss the evolving political and legislative agendas relative to large-scale investment in existing and new farmland in the region and how their funds are providing opportunities for investors to participate in the region’s agricultural development.

Where are the opportunities geographically and by crop?

How do managers add value to enhance returns?

What is the likely impact of inflow of investment capital on price levels in the farmland sector?

What are the major tradeoffs between different locales within South America?

What are the return expectations of different strategies such as converting pasture to crops vs. acquiring developed cropland.

12:45-14:15 – Networking Lunch

14:15-15:15 - Eastern European/Former Soviet Union Farmland
Moderator:
Charles Bausman, Director, AVG Capital Partners (Razgulay)

Panelist:
Mark Foster-Brown, Partner, Altima Partners
Jason Silm, Head of Agriculture Fund Management, VTB Capital
Henry Wilkes, CEO, InvestAg Savills

Eastern Europe and the Former Soviet Union represent an opportunity to acquire tracts of farmland or enter into long-term lease concessions and produce on what is generally considered the best quality earth in the world. After decades of underinvestment, adoption of modern agricultural practices in the region has in many cases resulted in the doubling of land productivity. Hear from a panel of leading managers in the region with different approaches in terms of geography, operating approach, financial structure and strategy execution.

What are the particular challenges and opportunities in Eastern Europe/Former Soviet Union?

What are the particular risks associated with individual countries (title, logistics, etc.) and how do managers address these risks?

What are the return expectations on investments made in Eastern Europe / Former Soviet Union compared with those in other geographies?

15:15-16:15 – Responsible Investment in Agriculture
Presenter:
Grahame Dixie, Agribusiness Unit Team Leader, Agriculture and Rural Development, World Bank

Development of large-scale agriculture is considered a key factor to ensuring the ability to deliver increasing volumes of food and feed crops in order to meet rising demand from a growing world population. Yet as institutional and corporate investment in large-scale agriculture expands, tensions have arisen over the potential displacement of small holders and the risk of environmental degradation of undeveloped lands. While there have been abuses in a few cases, in general agricultural operations backed by institutional investors have a strong sense of social, economic and environmental stewardship. Hear the World Bank perspective on how they are championing social, economic and environmental stewardship as well as new business models that are being developed to increase agriculture production sustainably.

What strategies are being implemented by fund managers in order to address these issues?

How does concern over sustainability differ in different parts of the world?

What role do national governments, multilateral organizations, NGOs and end investors play in determining how investments should be monitored for compliance with sustainable objectives?

What lessons have been learned from success stories and failures in terms of sustainable investing?

What is the likelihood of 3rd party verification schemes being established and accepted for monitoring of investment projects in developing regions?

Agenda subject to change.