Food as an investment theme continues to gain traction amongst investors, both locally and globally says boutique investment manager, Terra Capital.
Terra Capital’s new small cap fund, now open for investments, called Terra New Horizons Fund, has included the Australian based seed developer Abundant Produce (ASX:ABT) in its foundation portfolio as a niche stock with significant potential.
Terra New Horizons Portfolio Manager Matthew Langford said: “The food-related sector continues to attract investor intention and for good reason.”
“World population is growing at 1.2% pa, with Asia a particular growth hot spot. There are issues around availability of fresh water, pest and disease problems, which add to the existing woes of decreasing arable land availability and bigger issues with declining productivity and salinity problems.
“There is general agreement that farmland as an asset, or companies with an ability to improve the use of arable land are likely to out perform most other assets over time. This is why we at Terra Capital have interest in Abundant.
“The commercial seed industry is dominated by a small number of transnational pharmaceutical corporations who have acquired or merged with competing firms. Since the commercialization of transgenic crops in the mid-1990s the sale of seeds have been dominated by BASF, Monsanto, DowDuPont Agri, Syngenta/ChemChina and Limagrain.
“Abundant are positioning their products as high quality, non-GM seed cultivars which benefits both growers and consumers. They are expected to enter into long-term global sales and distribution agreements in return for loyalty payments,” he said.
Jeremey Bond, Chief Investment Officer and founder Terra Capital added that The Terra Capital New Horizons Fund, which has delivered a 26.2% return in 8 months since its inception, is designed for investors seeking exposure to small emerging companies with the objective of superior absolute returns.
“We will continue to look for companies that offer significant technological or business model innovation. “
“Our flagship fund, the Terra Capital Natural Resource Fund, since its inception in June 2010, has significantly outperformed all benchmarks to become a leader amongst its peers, with a return of 26.7%p.a. for investors”, said Bond.
