First State Investments (UK) has expanded its offshore product range with the launch of the First State Global Agribusiness Fund.
The dollar-denominated fund will be domiciled in Ireland and will be managed by the global resources investment team.
Managed from Sydney by Renzo Casarotto, portfolio manager, and Skye Macpherson, co-portfolio manager, the fund aims to deliver strong long-term returns by investing in agribusiness companies.
Agribusiness companies are involved in the production, processing, distribution and marketing of agricultural products.
The fund will be formed of a concentrated portfolio of a minimum of 25 stocks and no more than 75 stocks.
The fund’s portfolio will select from a universe of 400 companies across seed, fertilisers, crop protection, equipment services, farming operations, technology and water industry sectors.
The fund’s key aim is to remain diversified across geography, sectors and market capitalisations and to maintain a consistent low-risk investment policy. The investment team seeks companies that it believes are able to drive profit growth through increasing production volume, while maintaining conservative balance sheets and healthy margins.
Casarotto says: “We believe that the agribusiness sector offers investors the potential for strong investment opportunities and portfolio diversification. We have a team of specialist investors and aim to take advantage of market inefficiencies with our global approach and extensive programme of company visits. A combination of rising demand and constrained supply of soft commodities potentially opens up a number of opportunities for investment.”
It is planned that First State will launch a UK-domiciled version of the fund to UK and European investors at a later stage.