November 22, 2019

This article will be featured in the GAI Gazette, Volume 6, Issue 4, along with other articles addressing agriculture investment opportunities and surrounding themes. The magazine will be distributed in conjunction with the annual Global AgInvesting Europe event, to be held in London on 9-10 December 2019.

Join us in London to hear valuable insight and best practices from the expert speaking faculty, and network with key investors and innovators in the sector. Learn more and register.

By Michelle Pelletier Marshall, GAI Media         

The first Global AgInvesting (GAI) Europe conference took place in Geneva, Switzerland in December 2010. Responding to the global financial crisis, investors were showing increasing interest in real assets with a negative correlation to the stock market and a steady long-term return profile for wealth preservation. Farmland came into focus as a target area for investment, but there was little information to be had when conducting due diligence, including a lack of reliable reporting, a dearth of managers with a track record in the space, and insufficient understanding of the sector as a whole. HighQuest Group, a management consulting and M&A advisory firm specializing in the food and agribusiness sector, began fielding more and more requests from institutional investors for help in understanding agriculture as an investment opportunity.

These myriad inquiries led to the launch of GAI – the first in the U.S. in New York City in April 2009 – as a meeting to educate the allocators and to begin the work of building a network of sector-focused professionals, managers, and experts with the goal of establishing agriculture as a distinct asset class. Due to overwhelmingly positive response at the New York conference, the event expanded internationally, with close to 40 events in the last 10 years in Geneva, London, Abu Dhabi, Dubai, Singapore, and Tokyo.

As the ag sector turned its attention to the fact that the world population would be nearly 10 billion by 2050 with the corresponding mouths to feed, there was increased focus in the sector on modernization, automation, and robotics, catapulting agriculture technologies (agtech) to the forefront of the news. GAI began covering agtech investment opportunities with a summit day at the flagship New York event in 2013, followed by the launch of one of the first stand-alone conferences on the topic – GAI AgTech Week – in San Francisco in 2015 and 2016. The following two years, we brought the conversation to the east coast innovation hub of Boston. Since rebranded AgTech Nexus USA, the conference premiered in the U.S. Midwest this year with our first event in Chicago, and the series expanded with AgTech Nexus Europe in Dublin in 2017 and 2018.

When Global AgInvesting celebrated its 10^th anniversary flagship New York event in the spring of 2018, we reached out to the founders to learn more about its creation, mission, and future direction.

In this endeavor, GAI Gazette spoke to Greg Mellinger, CEO of HighQuest Group; Philippe de Lapérouse, managing director and head of HighQuest Consulting; Chris Erickson, currently president of Parsonage Lane Advisors and formerly managing director with HighQuest; Hunt Stookey, presently director of research and investment strategy at Ceres Partners LLC, and previously managing director at HighQuest; and Michael Whitehead, ANZ Bank, Agribusiness Research/ANZ Client Insights & Solutions (CIS) of Australia, who was a collaborator for the inaugural event, and one of its first speakers.

1.)  Tell us about the “birth” of Global AgInvesting

HS: HighQuest was already running very content rich conferences in the soy and grain value chains, and we were increasingly having conversations with people around understanding investment in agriculture, and had written many consulting proposals on the sector.

PDL: So when we were approached by a couple of institutional investors who were looking to add farmland as another asset class with their timberland allocation, we figured it might make sense for us to organize an event to help institutional investors understand how to invest in the sector.

CE: They [the investors] didn’t have a strong understanding of the fundamentals behind agriculture but they liked the longevity of the asset class, and that it was a real asset, and they were interested in investments.

GM: Hunt and Chris formally pitched the Global AgInvesting idea to me in November 2008. Of course the backdrop of this is in ‘08 there was the banking crisis and everything was basically falling down with incredible duress in the market. So while it was very risky, I believed in the team and the concept of doing it so I was very supportive of giving it a go.

HS: It was a little hairy since we were a very small firm and had to take on significant financial risk simply to secure a location in New York. And it was a different type of conference such that people didn’t sign up in advance like the other conferences we’d hosted. But as the attendee list grew on our website, more people registered. Also, at that point, no conference in the world was addressing these topics. What we collectively did really well and continue to do, is that this a conference driven by content and content experts, not by a conference company trying to find content experts on a hot topic to launch a conference. I think this has been a critical differentiator in what’s kept GAI true to its promise. It’s always had a curriculum; it’s always been curated.

2.) How did the content come together?

PDL: We talked with various people in the industry to get feedback on what would be of interest to investors and asset managers in the space, and what they thought the opportunities were. The first event was very much focused on farmland – looking at real assets for investments that were not correlated with the markets and that would provide preservation of capital.

HS: There was a lot on farmland, in one track, plenary sessions. Most of the agenda came from what we had written in our consulting proposals. Through our consulting and industry network we knew who we wanted as speakers and how to get in touch with them. GAI is a curriculum – it is content rich and always has been, and that’s what brings people in.

CE: We designed the event around different regions – North America, South America, Eastern Europe, Australia and New Zealand, Africa, etc., – as each had its own growth characteristics and market supply and demand fundamentals.

GM: I think our team was very industrious in terms of tapping into a lot of great people, such as Michael Whitehead, Jeff Conrad (currently of AgIS), and TIAA-CREF, so there was a lot of collaboration with the marketplace in creating the agenda.

MW: GAI has always made sure the event was interesting… so many conferences people go away saying that was like an advertisement for the speaker or it was not controversial enough to spur conversation, but with GAI people go away and say ‘I learned something that was interesting and that is one conference I want to go back to.’

3.) What was the original mission for GAI? 

PDL: To convene and provide a platform for asset managers and investors to meet and discuss trends and opportunities for investment in the global food and agro-industrial value chain.

CE: It was about becoming the place to help educate investors and provide opportunities for investment firms. We were really there to try to help set up an asset class that was recognizable, and we’ve helped that 100 percent!

HS: To become a clearing house to connect those who were raising money in the space and those who had interest in the space. It was incredibly opaque back then; it’s a lot richer and more transparent now, in many ways because of GAI, but also because more money has come in [to the space]. 

4.) How was the 2009 inaugural event received by the industry?

CE: Just five weeks after the Madoff financial crisis announcement we were calling people for sponsorships, speakers opportunities, and seeking out attendees. Quite frankly, we were not sure anyone would show up. But luckily we ended up with about 175 people, which for a first year, we were quite pleased with, as were the attendees.

HS: I think everyone who was there thought ‘Wow, this is great!’ Because it was content rich, it was a very valuable curriculum, it explored the topics and offered some insights. It wasn’t just about managers talking their book or trying to raise capital. We realized pretty quickly that the value proposition was that the managers wanted to be in front of the audience, and our job was to get dollars in the seats. 

GM: The room was crowded and people were standing along the walls. We knew that there was a huge amount of interest in ag investing as a result [of this turnout].

MW: The global panic over food shortages meant that there was a global boost for ag, so while the banking market was bad, the market for ag just kept getting stronger and stronger. At that first event there was absolute enthusiasm and interest in that room to learn more about what was going to be this fantastic, long-term asset class. 

5.) How about the expansion of the event?

GM: Within a couple months of the initial event, there was great interest by a number of the players to bring it to Europe. For a number of reasons, Geneva made sense as a host location. 

PDL: In the second year, we expanded beyond farmland to cover other investment area opportunities in private equity, venture capital, and commodity index funds, and we started breaking out into track sessions, rather than all plenary sessions.

HS: We added the short course in 2012 because we realized that for people who had looked at the space there was a lot of basic info they didn’t need to hear again, but for those new to the space, they needed some foundation, so the short course was designed to provide those fundamentals. We also learned that while the managers would go anywhere in the world to raise capital, the capital would stay regional, which was the impetus to expand [the conference].

CE: We evolved the event over the next two to three years where we started bringing in downstream opportunities to ancillary portions of the value chain, like transportation and logistics, into what GAI has today, which includes venture capital opportunities. There was continuity with us because we were an agricultural company that really wanted to focus on agriculture, not like some of the shops who’d have an ag conference one week, then one on a completely different topic and industry the next.

STAY TUNED NEXT WEEK FOR PART II OF THE STORY…

~ Michelle Pelletier Marshall is managing editor for Global AgInvesting’s quarterly GAI Gazette magazine and an occasional contributor to GAI News. She can be reached at mmarshall@globalaginvesting.com.