The First State Global Agribusiness Fund has recently celebrated its three year anniversary and is one of the more established products in the market. Those who invested in the Fund when it launched have seen their investment grow by 32.5% over the three years to the end of May 2013 [Source: Lipper], which underlines the attractive investment opportunities that exist.
Investing in agribusiness requires a specialist skillset
Given the specialist nature of this niche area of the market, First State believes it is imperative that investors have a skillset and background which is uniquely linked to the agribusiness sector. The managers of the First Stage Global Agribusiness Fund combine financial skills with backgrounds in agriculture, engineering and chemistry. This is a unique combination of expertise that few competitors can match.
First State believes there is no substitute for visiting companies’ operations first-hand in order to assess the economics of each asset and to better understand the everyday challenges that are faced. The research effort therefore continues to be based on a high level of contact with agribusiness companies globally. In the three years since the First State Global Agribusiness Fund was launched, the investment team has completed more than 150 agricultural site visits to over 20 countries in order to help identify the best long-term investment opportunities.
The focus is on the upstream and mid-stream portion of the agricultural value chain, as these companies are beneficiaries of the expanding volume requirements in the agricultural industry. The portfolio typically includes companies that are enhancing the productive process or expanding their productive capacity. The emphasis is on companies which have strong production growth profiles, better than average margins, conservative balance sheets and management teams that are capable of delivering strong shareholder returns through time.
For more information on the First State Global Agribusiness Fund visit www.firststateinvestments.com