Wednesday, July 25, 2012

Finding the Needle in the Haystack

Hedge fund managers are a rare breed – they zig when the markets zag; they go long when the rest of the market goes short – they find the diamonds in the rough when others just see dirt. However, what really sets them apart is that sometimes the opportunities are staring investors, regardless of their expertise, right in the face and they see it, while others do not.

Marc Lasry of Avenue Capital has been looking at the Euro Zone and seems to like what he sees. Both, he and Richard Furst, a senior portfolio manager at Avenue, have done the work and believe that the continued uncertainty in Europe provides them with a unique opportunity to make money for their investors. Read the story in Monday’s New York Times here.

English: The clock in Trafalgar Square in Lond...
Clock in Trafalgar Square in London displaying a countdown to the opening of the 2012 Summer Olympics: from top, days, hours, minutes, seconds. (Photo Wikipedia)
Lasry does not seem to be the only one looking at opportunities in Europe. Firms like Blackstone, Apollo Global Management and Kohlberg, Kravis Roberts are also seeing green in Europe while the rest of the world sees red. It is not a quick hit for these folks – Lasry sees a three to five-year time horizon for his efforts. Patience, he expects will pay off. Perhaps, it is a lesson for all of us?

Our post is short, this week as we remain blanketed in dogs days of August in the middle of July and are preparing to watch the London Olympics. We will be back next week. In the meantime, stay cool and drink lots of fluids.

Wednesday, July 18, 2012

It’s the Volatility and Uncertainty

Volatility here, volatility there, no returns anywhere.

That seems to be the rallying cry from the media these days and how hedge funds are performing amongst all of the current and potential economic uncertainty.

Its seems from recent reports in the popular press that Mr. Buffett was correct when he said, “it is only when the tide goes out do you see who is swimming naked.”

English: Ocean surface wave.
 (Photo: Wikipedia)

Earlier this week, Reuters posted and article quoting a manager saying that there was too much political and economic uncertainty for them to do much of anything other than operate in a mode of capital preservation. Read the story here.

If the political and economic uncertainty wasn’t enough, the news last week about the fraud at Peregrine Financial Group Inc. helped push more people into cash. The reports by the Journal and Bloomberg picture paint a very bleak picture of the firm’s Chairman and Chief Executive Office Russell Wasendorf Sr. who like Mr. Madoff seems to have admitted to the fraud and taken full responsibly for stealing over $200 million.  Here is an update on the story.

Maybe it is a good thing that the Olympics are starting in a week or so.  Hopefully, the Games of the XXX Olympiad will offer a much needed distraction from the uncertainty.  We are looking forward to watching the games and marveling in the athletic achievement that takes place.

In the meantime, we are staying out of the heat and working hard on researching and developing a number of programs for the fall and early part of 2013. As always, we welcome your comments and suggestions.

Wednesday, July 11, 2012

Fifty Shades of Ag Investing

Agriculture as an asset class has gained major traction with investors of shapes and sizes in the last few years. Institutional investors’ allocations to agriculture are expected to grow from 1% of portfolios to 5% in the next five years according to industry estimates. That increase in investment is sorely needed. According to UN estimates, by 2030, the world will need at least 50% more food, 45% more energy and 30% more water. In short, the population of the planet is growing faster than its food and water supply. To learn more about the coming shortage click here.

(Photo: thegreenpages)
The metrics alone are cause for urgency, and our research shows that investors are paying attention. But with so many entry points into agriculture investing, investors are still forming their strategies.

Many institutional investor players have entered the game with farmland investments, although some are turned off by lofty valuations in the U.S. or lagging yields abroad. Others are pondering agribusiness private equity plays, both domestic and in emerging markets poised for growth.

The research is clear – there is an abundance of investment opportunities in ag across the food chain, from inputs to row crops; farms or packaged goods; grain elevators or disruptive technologies. In a relatively untested industry, investors are hungry for tried-and-true agriculture investing strategies.

Our AgReturn series, which released its agenda this week, gives investors the inside scoop on the myriad opportunities in agriculture, including commodities, farmland, biotech, crop protection and many others. This is a comprehensive view of an overwhelming space that highlights true success stories in an industry some have worried is the new cleantech.

This year’s AgReturn speakers have accomplished a lot in ag recently. They’ve debuted the hottest non-Facebook IPO of the year; sold portfolio companies to major corporate agribusinesses; or set the stage for governmental agriculture policy.

It’s a feast for investors who are hungry for opportunity. Click here to see a bit more about the November program.

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