sembrador premium agriculture fund …13 valoral advisors: specialized in latam food & agri...
TRANSCRIPT
SEMBRADOR
PREMIUM AGRICULTURE
FUND MANAGER
PEI- AGRI INVESTOR
CHICAGO OCT 2015
Sembrador | 2015
B. SEMBRADOR
Investment thesis
High value added permanent crops
Sustainable agriculture
Precision agriculture
Management
Breaking “language” barriers
Visibility (dataroom)
Sembrador| 2015
CRECIMIENTO AGRICOLA
2005
AGRODESARROLLO
2010
VICTUS CHILE
2014
VICTUS COLOMBIA
2015
Country Chile Chile Chile Colombia and other
Lock up period 10-15 years 10-15 years 10-12 years 10 years
StatusInvested
(75% divested)Invested Investing Fundraising
Assets 7 9 3 (6-7) N/A
NameFund
ownershipProducts Has Location
AGRODESARROLLO
El Arenal SpA 95%Table grapes,
pomegranates, citrus200 Vicuña
Pan de Azúcar S.A 90% Lemons & Oranges 100 Coquimbo
South Bloom SpA 85% Plums 32 Mostazal
Montegiallo S.A. 70% Kiwis and pears 65 Sagrada Familia
Nucis Austral S.A. 88,9% Chestnuts Walnuts 335 Trehualemu/ Linares
Saba SpA 85% Cherries, pears, apples 140 Linares
Andean Truffles SpA 82,5% Black truffles 100 Mulchén
Botanical Solutions
SpA50% Bio pesticide - RM
Savia Espárragos
SpA50% Post harvest technology - RM
SEMBRADOR - FUNDS
Sembrador| 2015
Grapes and pomegranates
Sembrador| 2015
Technology
Sembrador| 2015
Cherries
Sembrador| 2015
Chestnuts
Sembrador| 2015
Black truffles
*Pro forma values are hypothetical scenarios for illustrative purposes, based on various assumptions and future expectations that may not materialize or may change significantly. Substantiating data available upon request. Investors risk the loss of some or all of investment. This information is privileged and strictly confidential. It does not
constitute a guarantee, offer or solicitation of any kind and does not indicate liability on the part of the provider. Past performance and track record is not indicative of future performance. Future performance is not guaranteed. Please refer to the full disclaimer on page 2.
9
Pacific Agri Capital – Bill Randall (Founding Partner)
Real asset play through land ownership
Fragmented industries with strong
fundamentals and significant barriers to entry
Implementation of institutional best
practices to ensure low cost production
High social impact
linked to rural development
Positioning assets for exits
through strong governance and scale
Leading Latam agricultural asset manager and project developer
• Transplanting a successful agricultural model from Southeast Asia to Latin America
• Investing from Colombia with experienced international investment and agricultural professionals
• Focus on greenfield and mature permanent crops projects, including 1st level processing
9 year track record, participating in the successful development of over 30,000 hectares with >US$500m asset value*
• Fund 1: 39% IRR, Full exit
• Fund 2: 23% unrealized IRR*
• Fund 3: 98% unrealized IRR*
Investment thesis
*Pro forma values are hypothetical scenarios for illustrative purposes, based on various assumptions and future expectations that may not materialize or may change significantly. Substantiating data available upon request. Investors risk the loss of some or all of investment. This information is privileged and strictly confidential. It does not
constitute a guarantee, offer or solicitation of any kind and does not indicate liability on the part of the provider. Past performance and track record is not indicative of future performance. Future performance is not guaranteed. Please refer to the full disclaimer on page 2.
10
Through the implementation of best practices in the development, maintenance and post-harvest processes, the free cash flow of one hectare can increase by 5x
Cacao example – 5x more FCF from best practices*
(1) Cocoa Barometer
• Tree density
• Fertilization
• Pruning
• Pest & disease control
Comments Small Farm model Plantation model
• By-pass middle men
• No Africa government set price
• Premium for scale, quality and consistency
due to the centralization and quality control of
the post-harvest
• Certification premium
• Higher due to best in
class maintenance
practices
• Formal administration
(1)
• Irrigation &
drainage
• Strict seed
selection
• Cash and
operational
management
Production
(tonnes / ha)
Revenue
(US$ / ha)
Cash costs
(US$ / ha)
Free cash flow
(US$ / ha)
Price
(US$ / tonne)
0.5
1,000
350
650
2,000
2.5
7,500
4,000
3,500
3,000
Workshop A: Latin American Case Study
Agri Investor Forum 2015
Chicago, October 29th & 30th, 2015
12
Zooming into the region
Brazil
Paraguay
Uruguay
Argentina
Colombia
Peru
Chile
13
Valoral Advisors:
Specialized in Latam food & agri investments
AuM by main target region
(excl. commodities & listed equities)
100% = US$ 38.4 Billion
49%
16%
10%
8%
7%
6%
North America
South America
Europe
Asia Pacific
Oceania
Africa
CIS
Others
Number of active food & agricultural funds by region
6 8 11 18 23 31 34 38 47 50 52 524677
117140
167194 202
224231 235 239 242
52
85
128
158
190
225236
262278 285 291 29412%
9% 9%
11% 12%14% 14% 15%
17% 18% 18% 18%
'05 '06 '07 '08 '09 '10 '11 '12 13 14 1H'15 Q'315
South America Others
Source: Valoral Advisors.
Venture capital
funds
~ $50 Million
Farmland funds
~ $3.5 Billion
Structured
finance funds
~ $1.5 Billion
Private equity
funds
~ $1.5 Billion
14
Latam food & agri space:
3 main asset categories
Risk/return profile
High risk / High returnLow risk / Low return
Relative
liquidity
High
Low
Source: Valoral Advisors.
15
As commodities go down…
so do currencies.
Price evolution of selected commodities(Accum. variation since Jan’ 2012)
-80%
-60%
-40%
-20%
0%
20%
40%
60%
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
Crude oil
Iron ore
Copper
Soybean
Corn
Wheat
Average drop:
- 39%
-60%
-40%
-20%
0%
20%
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15
Argentina
Brazil
Chile
Colombia
Paraguay
Peru
Uruguay
Evolution of local currencies against the U.S. Dollar(Accum. variation since Jan’ 2012)
Average drop:
- 34%
16
M&A activity in the food & agribusiness sector:
Trends & sectors
Source: Valoral Advisors analysis based on several sources.
Regional food & agribusiness M&A volume
(US$ Billion)
M&A volume by main sector
• Animal protein
• Feedstock & biofuels
• Packaged food
• Beverages
Food distribution, food
retail & food service
Agricultural inputs
supply & distribution
Storage, logistics &
trading
Processing & food production
17
Perceived risk can represent an opportunity
in the current context.
Perceived
Actual for outsiders
Actual for insiders
Arbitrage opportunity
that can be captured
with the adequate local
approach
Risk
Conceptual
18
Where do we go from here?
What do lower asset values & lower currencies mean to investors?
How can investors play the income vs. appreciation game?
What can we expect from politics & regulations going forward?
How are niche themes like water, agtech, aquaculture represented
in the region?
Contact information
Disclaimer
The information and opinions in this document were prepared by Valoral Advisors Sarl (“Valoral”). The information and opinions are provided forinformational purposes only and are subject to change without notice. The information contained in this document has been compiled from sourcesbelieved to be reliable; however, the information has not been independently verified. Accordingly, no representation, warranty, expressed or impliedis made as to the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. To the fullest extentpermitted by law, none of Valoral, its directors, employees, agents or other person accept any liability for any loss whatsoever arising from any use ofthe content shown in this document.
Nothing in this document constitutes investment, legal, tax or other advice and no person’s objectives, financial information, or particular needs havebeen considered in preparing the information displayed. Before making an investment decision, you should consider the suitability of an investment inlight of your particular investment needs, objectives and financial circumstances and consult an independent professional financial or other advisor.
Copyright Notice: © Valoral Advisors Sarl 2015. All rights reserved.
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