8/3/2019 Menafundreview Q&A with Anric Blatt, Chairman of Global Fund Exchange

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Natural mega themes

WWW.MENAFUNDREVIEW.COM JANUARY 2012 MENA FUND REVIEW 19

WITH nearly 80 million net new people joining the planet each year, our worldis grappling with rising demand for foodand water and a strain on vital naturalresources. The investment community istaking sharp notice of these challengesand the profit opportunities they offer.

Global Fund Exchange chairman An-ric Blatt discusses his foray into crucialagriculture, water and natural resourcesinvestments and why he believes the timeis right for MENA based investors to al-locate capital to these mega themes.

After an extensive career in hedge funds,what drove you to dedicate your life andbusiness to this niche sector?

Easy access to capital in the 90s and00s ushered in thousands of investmentfunds that delivered very little value overand above illiquid and opaque leveragedbeta with too much money for nothing. Irealized that in order to prosper and flour-ish over the long term, an investment busi-ness must (A) add significant value at everystep and (B) invest in themes that satisfyan actual need or help meet an imminentscarcity.

All macro research roads led us to energyand its intrinsic vectors, agriculture and

water; important themes which are well un-derstood by GCC investors. On a personalnote, having grown up in a harsh, unfor-giving desert environment, I learned froma young age that sustainable practices andresource conservation are essential to sur-

vival. My business interests are focused en-tirely on providing profitable and respon-sible investment solutions in energy, water

and agriculture and accelerating capitalflows to the sectors that our planet needsthe most.

Given the recent upheaval surroundingfood security in the MENA region, letsbegin with agriculture. Where do you seecatalysts for investment?

Limited resources, increasing demandand rising food prices provide compel-ling reasons to invest in global agriculture.

We are seeing significant opportunities incommodities, farming and seed technologyand agribusiness, to name a few sub-sectors

within our agriculture portfolios. We com-

bine our medium term equity exposureswith short term commodity trading to off-set volatility and downside risk.

To say commodities have been volatileover the past few years would be an un-derstatement. What do you think hassparked these ups and downs, and whatdo you see ahead for 2012?

Youre right; we have experienced recordhigh food prices and market volatility incommodities. Weather anomalies and pat-tern shifts have devastated crops, leadingto unprecedented jumps in wheat, soy-beans, corn, coffee, sugar and other basiccommodities. Over the next decade, theFAO expects grain prices to remain 15-40percent above 1997-2006 levels mean-ing high prices are not going anywhere,but weather instability, low stock levels andkneejerk political reactions will continue toprovide our traders with an attractive op-portunity matrix to make money.

How is population growth contributing towhat appears to be a looming global foodcrisis?

We need to ask ourselves how we expectto feed the nine plus billion people that

will be living on Earth by 2050. Startlingreports from the FAO estimate global ag-ricultural production must increase 70percent to meet new demand. Nearly allnew demand is coming from the develop-ing world, where agricultural output is setto double. Despite years of advances, gainsin agriculture yield per acre have slowed toless than one percent a year, so we do havesome serious work to do to meet futureneeds. The good news is that agri-scienceand technology is attracting significant newinvestment and government focus. As a re-sult, we are seeing a lot of opportunity toprofit here, but it goes hand in hand with

water.

It has been reported that by 2025, theworld will need 25 percent more waterthan is currently available. What water is-sues do we as investors need to be awareof?

Humans are extracting freshwater atnearly 100 times the natural replacementrate. Water scarcity is already an economicconstraint in major growth markets such asChina, India, Indonesia, Australia and the

Western U.S. By 2025, per capita wateravailability in the Gulf will likely decreaseby 50 percent. Rising population and per

capita consumption will soon become amajor factor in both energy and water mar-kets in the GCC, for the energy industry is

highly water dependent. The time to acton these catalysts is right now, while glo-bal equity prices are reasonable and largelong-only commodity players are rebuild-ing their books.

Finally, what are your plans here in theMENA region for 2012?

We have a five year track record of al-locating capital to these vital asset classesand are now a known entity to the largerinstitutional players here. Currently, weare in negotiations to develop a vital as-sets fund management hub in the region,for I strongly believe that forward thinkingcountries like Abu Dhabi and Qatar havethe ability to really make a difference, andprofitably so, in this area.

This year, we will be launching our multi-manager managed account platform toprovide allocators complete transparencyand security right through to underlyingposition. Our plan is to combine this withour advanced risk monitoring platformthat we launched in 2005, allowing eachclient to set their own risk budgets and re-porting. Additionally, direct access to oursegregated clean energy, water, agriculture,energy and natural resource portfolios isnow available.Treat the Earth well. It was not given to

you by your parents. It was loaned to youby your children

For more information on Global Fund Exchang-es agriculture, water and energy sectors, visit:http://www.qfx.qa/

FEATURES

Anric Blatt, chairman, Global FundExchange

8/3/2019 Menafundreview Q&A with Anric Blatt, Chairman of Global Fund Exchange

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