The Rabobank brand
signifies strength,
knowledge and quality
within the F&A sector 9
24 ISSUE 19 a THE WORD
SECTOR SPECIAL FOOD AGRIBUSINESS
Innovation
Crossing the Group's boundaries
franchise globally. As Ter Haar explains, although F&A is a very
fragmented market, there's a lot of cross-border opportunity.
"We see the cross-border business (for example in Asia) as the
main growth area, and it's also the area in which we can both
improve. We expect to see a lot of Asian companies moving into
Western European markets and the United States in the future.
We currently have quite a number of transactions in the pipeline
that we're working on jointly, and l'm very positive we'll be in a
position to announce something shortly. There are a lot of joint
mandates already - joint pitches to clients, advertising, and so
on. The feedback from clients has been extremely positive
so far. They understand the logic behind the cooperation, and
since they have experience of working with both firms they see
the added value."
In November 2008, Rabobank launched the first business platform
within the organisation that leverages the global office network,
its specialist F&A industry knowledge and its fund structuring
expertise, to create Rabobank-branded non-listed investment
vehicles. The innovative result, Rabo FARM, is a joint venture
between Rabobank International and Bouwfonds Real Estate
Investment Management (previously known as Bouwfonds Asset
Management). Putting together long-term investment funds for
investors worldwide, Rabo FARM funds will invest principally in rural
resources - such as agricultural land and water resources - as well
as primary production in the world's major agricultural production
markets.
So what are the advantages to a business like Rabo FARM?
Primarily, Rabo FARM will enable rural banking clients to
monetise wealth locked up in agricultural land assets, or realise
growth ambitions by providing capital to buy additional land in
partnership with Rabo FARM. Co-ownership of the land supports
mutual commitment and aligned interest in maintaining the
land's fertility, which maximises the land's productivity and
capital value appreciation. Representing real cooperation
between farmer and bank, Rabo FARM is a natural extension
of Rabobank's cooperative roots - now extended to farmers
across the bank's global markets.
According to Ed Smith, Rabo FARM's CEO, and Bart Pierik,
director of Operations Rabo Securities, Rabo FARM was
established as a joint venture between Rabobank International
and Bouwfonds because of the companies' complementary
knowledge, skills and experience, which form a solid foundation
for cooperation. "Rabo FARM's ambition is to build a highly
profitable and leading global business for Rabobank Group,
which enhances our brand, our profitability and our cliënt
franchise. In the next 12 months, for example, we hope to
launch funds covering South America, Europe and Australia.
However, that isjust the beginning and later this year we will
evaluate the opportunities to develop further funds in 2010."
Bart Pierik Ed Smith
Because Rabo FARM funds are open to both existing clients and
prospective clients, collaboration between colleagues from
Rabobank International and Rabo FARM will be essential, Smith
says. 'The value of Rabo FARM's funds can be measured by the
intense interest and support we have already received from local Rl
offices, rural banking teams as well as Rabobank Group companies
with investors hungry for Rabobank products in this asset class,"
he says. "In addition to being attractive to rural banking clients, we
have seen that both institutional and retail investors are seeking to
diversify and increase exposure into more tangible 'alternative' asset
classes, such as agricultural land, where long-term value accretion is
perhaps more predictable, more easily understood in the context of
global population growth and not correlated to financial markets."
With a track record of providing finance to the F&A sector for
over 100 years, and a unique global network of offices and
rural banking clients from which to source premium land deals
and operating partners, Rabobank's Rabo FARM is uniquely
placed to develop long-term investment funds within its
chosen sector. "We have the Rabobank brand that signifies
strength, knowledge and quality to both farmers and investors,"
Smith says. "All of this makes us a 'five legged sheep' in the
agricultural resources fund management sector, and further
enhances the position of Rabobank as the financial link in the
global food chain. Additionally, investors are nursing a lot of
financial wounds currently, and there's a real need to return
to basics - looking more at tangible assets, looking at credible
investment rationales, looking at long term, sustainable value
growth, looking at knowledgeable management, and so on.
And these are all reasons that support the Rabobank mantra of
concentrating on F&A and nurturing new businesses such as
Rabo FARM."