Galtere, a US registered investment manager, has launched an agribusiness private equity strategy that aims to take advantage of a fundamental shift in global market dynamics and a growing worldwide demand for commodities from institutional investors.
The agribusiness strategy makes direct investments in industrial scale commodity production facilities in Brazil, Uruguay and Australia.
The strategy employs a long-term investment horizon of seven years to increase efficiency, production and profit of its projects, before monetising its investments via trade sale or IPO.
Galtere is aiming to raise USD1bn of assets from institutions, endowments and family offices.
The strategy is lead-managed by portfolio manager Renatto Barbieri who had previously spearheaded the development of Deutsche Bank Global Markets’ natural resource private equity business, and whose 20-year track record spans five continents across a wide range of commodity markets. Renatto is supported by the core Galtere management team in conjunction with regional operating teams.
The strategy aims to capitalise on a market trend the firm has termed “inverse stagflation”, where deflation in financial assets such as equities coincides with inflation in real assets, such as agricultural commodities. The firm believes that the trend will see real assets become the dominant asset class in the near future, and has launched the strategy to seize on the resulting pricing growth of commodities.
In addition, the strategy will take advantage of a favourable supply/demand dynamic for agricultural commodities as sources of food and fuel. The UN has predicted global population to be 7.7 billion by 2020, while arable land is expected to decrease by 100 million hectares in the same time.
The strategy targets a diverse range of macro driven private equity global agribusiness opportunities and will primarily concentrate on investments in agricultural production, infrastructure and technology and will be looking at opportunities across soft commodity food staples.
Barbieri says: “At Galtere, we have always advocated a long term view on commodities markets, rather than reacting to short term changes, and this is an ideal strategy for investors who share that view.
“I believe the geography, supply and demand conditions and resources of the countries we have targeted present a wealth of attractive agricultural projects, and we have already begun to invest in projects that offer excellent long term growth potential. The current global and financial conditions make it an ideal time to be launching this strategy, and we are excited at what we can achieve for our investors.”
