Investor says agriculture still a great pick
In the face of the global economic crisis, agriculture remains one of the safer bets when it comes to investing, particularly in investment funds specializing in farmland, according to a well-known global commodity investor.
January 7, 2009 By Agcapita Farmland Investment Partnership
January 7, 2009
Global commodity investor Jim Rogers recently announced that agriculture remained one of his central investment selections for 2009. His reasons were simple – ongoing and worsening agriculture production problems in the face of relentless demand:
* Farmers are having trouble getting sufficient working capital loans; and
* Farming is energy intensive and oil production is in decline outside of OPEC.
For investors considering an investment in agriculture or agricultural commodities, consider farmland. Agcapita is a Calgary based private equity firm that allows investors to gain direct exposure to Canadian farmland via the only RRSP eligible farmland fund in Canada.
Farmland is an excellent inflation hedge. During the last commodity bull market & high inflation period in the 1970s, equities materially underperformed farmland. Western Canadian farmland went from around $100/acre to $550/acre (550 percent total return and 176 percent in inflation adjusted terms), cash held in a money market account barely kept ahead of inflation (six percent inflation adjusted return) and the S&P 500 index returned less than two percent per year (a loss of almost 50 percent in inflation in adjusted terms).
Agcapita's investment team has over 40 years private equity and fund management experience and over $1 billion in total career transactions and previously managed a group of emerging market funds with almost C$500 million in assets for one of the largest banks in Europe.
Agcapita's advisory Board is composed of accomplished agriculture entrepreneurs and academics, high profile political figures and investment experts including the former UK Chancellor of the Exchequer, Rt. Hon. Ken Clarke and Jim Rogers, co-founder of Quantum Fund. Our members bring a deep knowledge of the factors driving agriculture and farmland values – including rapidly growing emerging economy food demand and inflation. Jim Rogers has been an outspoken and trenchant critic of recent US monetary and fiscal policy. He says the bail-outs being conducted by the Federal Reserve and the US Treasury are "unleashing an inflationary holocaust' on us all.