Investment Philosophy

Having a specific acquisition target before raising the funds comes with a range of benefits:

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i. Investor confidence & control

Investors know exactly what they are buying. You can decide if it matches with your investment appetite and control how much stake to hold.

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ii. High Capital Utilisation

This means no funds are sitting idle, which would otherwise drag down the investment return on funds.

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iii. Better Selection of Acquisition Target

As we are NOT under pressure to put funds to use, we have the ability to wait for the optimal opportunity to emerge, i.e. time is on our side.

The answer to the Look vs Money-in-Pocket is simple:

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The ability to generate operational free cash flow is paramount.

 

Farms with outstanding infrastructures and equipment yet poor cash flow are viewed as unfavourable. 

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Good operational free cash flows can:

i. contribute to better farm value

ii. be distributed back to investors

ii. be used to reinvest in the farm to achieve better efficiency thereby further boosting cash flow

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Fresh produce prices are known to be extremely volatile. Agricultural farm investment must be assessed on medium to long term averages.

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i. Key to Short term Survival - High Gross Margins

We prioritise high gross margins over production quantities. The goal is to provide investors enough dividends to cover the funding costs in adverse market conditions.

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ii. Key to Medium Term Operational Profit - Price Volatility

Fresh produce price also tends to sharply spike every now and then. The goal is to reap extraordinary profits in these times and this will contribute to the bulk of the excessive return

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iii. Key to Long Term Capital Gain - A Macro View

We assess the balance of demand and supply of fruits in the medium to long term by analysing macro factors such as immigration trends, new plantings, export and import countries.

We invest in farm only if:

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i. We understand the product (fruit) from either growing them and / or marketing them

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ii. We know the right people to manage the farm

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iii. We have existing relationship in the farm's geographical area.

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