ALTERNATIVE INVESTMENT UPDATE
A non-discretionary uncorrelated asset Agriculture investment has performed well during the pandemic, thanks to a few unique attributes
for more mature companies. “The nice thing about agriculture is it is an international market,” Brooks says. “Canadian ag tech can be exported around the world.” While agriculture hasn’t been immune to the impact of COVID-19, it wasn’t affected the same way as other sectors. “The pandemic isn’t changing the underlying fundamentals,” Brooks says. “There have been dislocations along the value chain – food service and restaurants – because people are consuming
“We see opportunities for investors in private agriculture technology and agriculture cultivation of land” Agriculture has proved to be a resilient asset class during COVID-19. Despite supply-chain disruptions, people still need to eat, making agriculture a non-discretionary spend. Even before the pandemic, the Canadian agriculture industry grew by 11% between 2012 and 2016, while the overall economy grew by 8%. Jason Brooks, president and co-founder of Invico Capital, says these are just some of the reasons his firm includes agriculture in its Diversified Income Fund. However, accessing the industry can be a challenge for investors. “The value chain on distribution of agriculture products is fairly
consolidated,” Brooks says. “Where we see opportunities for investors is in the less-served market: private agriculture technology and agriculture cultivation of land. As a component of the portfolio, it represents a nice, uncorrelated asset, and we like its resiliency.” Invico gets exposure to the space in two ways: by investing in private agriculture technology companies and land ownership. For the latter, Invico participates in a pooledstyle structure with partners such as the Avenue Living Agricultural Land Trust, which consolidates Saskatchewan-based farmland. On the agriculture tech side, Invico looks
DealSquare adds $20 million MIC offering
DealSquare has added to its platform a $20 million private placement offering for the Giavest Mortgage Investment Corporation (GMIC) from Alberta-based Carecana Management Corporation, which has $240 million in AUM and manages a number of MICs in Western Canada. GMIC provides investors with an opportunity to invest indirectly in commercial and residential mortgages in the region, where Carecana believes the mid-tier lending markets are potentially underserved by larger financial institutions.
food differently. The virus itself also affected meat-packing plants, forcing shutdowns. Those were disruptions, but not to the underlying fundamentals.” Risks within the sector include crop production, rent from farmers and fluctuation of commodity prices. Brooks says it’s important to have insurance and hedging strategies as protection, and he also urges advisors and investors to examine the managers involved. “Focus on the track record of the manager,” he says. “Segregate their agriculture investments to see how they have done. Look at the correlation of the returns compared to the market and look for consistency.”
Windsor Private Capital debuts real estate fund
Toronto-based private asset management firm Windsor Private Capital has launched its first real estate fund. Backed by a capital raise of $150 million, the WPC Real Estate Opportunity Fund I LP will acquire opportunistic and distressed real estate assets in Ontario’s Golden Horseshoe region. The fund, which will be managed by Windsor Private Capital’s senior executive team, will target sites in the early stages of development or redevelopment that might have been impacted by the recent economic uncertainty.
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16/10/2020 5:01:57 AM