global farmland fund_egb teaser

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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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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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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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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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


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


September 2006


September 2006


October 2007


October 2007


January 2008


January 2008


April 2009



April 2009



June 2009



June 2009


Cutting-edge, tailored alternative investment solutions

in the environmental space

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Contact

EBG Capital AG, Lavaterstrasse 40, CH-8002 Zurich, Switzerland

Ralph Kretschmer Dr. Bernd Schanzenbächer

Managing Partner Managing Partner

[email protected] [email protected]

+ 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.

global farmland fund_egb teaser

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