AGRIBUSINESS PRIVATE EQUITY OPPORTUNITIES 2015
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BoxRED Corporate are a specialist Australian and New Zealand Agribusiness private equity manager and boutique corporate services and advisory firm with a proven track record in successful Australian and New Zealand Agribusiness project development, operation, and investments and deep linkages to Asian and Pacific markets
We are a specialist Australian and New Zealand Agribusiness private equity manager whose team has a proven track record in the three dimensions critical to achieving superior returns:
Successful Australian and New Zealand Agribusiness sourcing, development, operation and commercialisation
Deep linkages to Asian and Pacific markets – in particular, with commodity purchasers and end users, Australian and New Zealand Agribusiness companies, investors and governments
Private equity investment management
We are also a boutique corporate services and advisory firm with a proven track record in successful Australian and New Zealand Agribusiness project development, operation, and investments and deep linkages to Asian and Pacific markets.
We are majority owned by The Merkin Group (The Rothsey Family Office) in Australia with shareholdings expected to be held by Business Succession Partners Hong Kong , other stakeholders, and we are in discussions with potential joint venture partners which provides to opportunity to accumulate in specie assets, structures and additional core competencies.
Our unique strengths are:
- The outstanding track record of our team members as agribusiness discoverers, developers, operators, managers and investors with an ability to recognise and unlock significant value by advancing projects from sourcing through to production;
- Our experience, deep linkages in, and knowledge of, the Australian, New Zealand ,Asian and Pacific buyers market, which provides us with a unique insight into commodities demand and access to exit scenarios; and
- An investment strategy which allows our highly experienced team to identify and unlock value from high quality asset opportunities at various stages of the agribusiness life cycle
This enables us to be more effective in originating proprietary investment opportunities, evaluating project potential and project risks, adding value to investee companies and generating successful exit outcomes.
BoxRED Corporate has offices in Noosa and a joint venture in Hong Kong (BoxRED BSP Limited) with representatives in Melbourne, Sydney, Brisbane Adelaide, Bahamas, Cayman Island and networks across the globe.
Most pertinently we have an array of strategic relationships with legal, financial, technical, operational, political, research, financial services, capital and debt markets, asset and property managers, industry advisors and managers and other professionals which can provide an end to end solution for the Fund and Investment Managers, our third party clients and our Investee companies alike
WHAT WE DO
BoxRED Corporate is the manager of the proposed The BoxRED Corporate Australian and New Zealand Agribusiness Fund (“The Fund”).
On behalf of the Fund,The Rothsey Family Office and our third party clients our role includes the following:
- Identify, originate and screen investment opportunities
- Evaluate potential investments
- Perform thorough technical, commercial, financial and legal due diligence on potential investments
- Structure and execute investments
- Identify and secure joint venture partners and financiers
- Source project funding where required
- Manage, and grow the value of, Fund investments, and third party client investments including participating on the Board of Directors of investee companies
- Physically manage assets and properties (where applicable)
- Execute the realisation of investments
Operate and administer the Fund (where applicable)
Manage and represent our third party client’s interests (where applicable)
Our core values are:
- Integrity in all our dealings
- Always acting in the best interests of our clients and investors
- Be passionate in all that we do
- Open communication with each other and with clients
- Seamless teamwork
- Encourage and reward success
- Exceed expectations consistently
- Responsible sustainable and holistic development, being sensitive to community and environmental concerns in the markets in which we operate
Our team has a proven track record in:
- Successful development, over 30 years, of Australian and New Zealand Agribusiness projects and companies across a wide range of commodities and countries, advancing early stage projects through the development stages into high quality producing agribusinesses;
- Achievement of superior investment returns in the Australian and New Zealand Agribusiness sector; and
- Building successful partnerships, joint ventures and linkages in Asia and Pacific, emerging markets and new frontiers for Australian and New Zealand Agribusiness, with investors, Australian and New Zealand Agribusiness companies, commodity end users and government in those markets, who are the key drivers of global commodity markets and prices, and key buyers of agribusiness assets.
Our specific experience includes:
Australian and New Zealand Agribusiness sourcing
- Target generation and the identification of prospects
- interpretation, data analysis and agribusiness modeling
Contact us for current details of real deal history in real time.
Developing, operating and commercialising Australian and New Zealand Agribusiness projects and companies
- Agribusiness and infrastructure development and construction (where applicable)
- Agribusiness operation and production
- Acquisition due diligence – Technical, financial, commercial and legal
- Local and foreign joint venture partner identification and assessment
- Establishing and operating joint ventures
- Negotiating and working with foreign governments
- Managing local government and community relations
Capital raising and project finance
- Assessing and arranging funding required for project and agribusiness development to advance project to production or ramp up in production
- Identifying and coordinating investors and financiers for agribusiness companies and projects including state owned and private owned enterprises
Global due diligence
- Financial and taxation
- Community relations
- Management of investee company
Marketing and sale of agribusinesses
Realisation and exits
- Identifying potential acquirers of projects
- Realising value of projects through trade sales, IPOs, mergers and acquisitions and other means
Private equity investment management
- Economics analysis and scenario mapping
- Commodity price forecasting
- Originating and screening fund investment opportunities
- Valuation of investments and projects
- Due diligence (technical, operational, financial, commercial, legal, governance)
- Deal structuring, mergers and acquisitions
- Participation on boards and management committees of investee companies
- Arranging and structuring equity and debt funding
- Realisation of investments and divestment of businesses
- Fund operation and administration (where applicable)
Asian and Pacific and global markets
- Advising, and assisting, Asian and Pacific investors buying into Australian and New Zealand Agribusiness companies and projects
- Raising capital from Asian and Pacific financiers, banks and investors
- Coordinating the construction of primary or processing infrastructure projects by engineering and construction companies (where applicable)
- Negotiating, structuring and executing joint ventures, investments, financing
- Identification, assessment and securing of joint venture partners
- Regulatory planning and compliance
- Working and negotiating with foreign governments
Identifying purchasers of Australian and New Zealand Agribusiness projects and executing the sale of projects to Asian and Pacific buyers
Our team has worked in the Australian and New Zealand Agribusiness industry and Asian and Pacific markets, over the last 30 years, with project and operational experience in many different locations around the region. Our experience and network provides us with a unique ability to:
- Originate proprietary investment opportunities
- More effectively evaluate investment potential
- Assess and manage jurisdictional risks associated with successfully developing a project
- Add value to investee companies
Realise the growth potential of investee companies
We also have many strategic relationships that underpin our investments, our proposed funds and those of our third party clients.
- All vertically integrated end to end food and beverage supply chain solutions especially FMCG
- Red protein
- White protein
- Seed and grain
- Fruit and vegetable
- Primary infrastructure
Governance and compliance are paramount to our business.
We have clear policies and processes to ensure proper governance in the management of funds and operation of our business.
A CONFLICTS POLICY THAT IS CLEAR AND TRANSPARENT
The BoxRED Corporate team combines deep Australian and New Zealand Agribusiness technical, development and operational experience with strong investing, governance and financial expertise.
Our team comprise individuals with extensive experience in the Australian and New Zealand Agribusiness industry, private equity and Asian and Pacific markets.
BoxRED Corporate’s Senior Advisors are established experts in their specific field within the Australian and New Zealand Agribusiness and investments industry. The Senior Advisors provide support and advice in investment origination and deal flow, investment strategy technical and commercial assessment and due diligence.
The Board of Directors of BoxRED Corporate is responsible for the strategic direction and governance of BoxRED Corporate
The Investment Committee is responsible for reviewing and approving all investment proposals, providing strategic input and monitoring investment performance.
RISK AND COMPLIANCE COMMITTEE
CORPORATE GOVERNANCE COMMITTEE
NORTON ROSE FULBRIGHT
Norton Rose Fulbright is a leading global legal practice offering a full business law service to many of the world’s pre-eminent corporations and financialinstitutions. They have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.
With over 600 lawyers in five offices in Brisbane, Canberra, Melbourne, Perth and Sydney, Norton Rose Fulbright is the largest international legal practice in Australia. Its international reach, and in particular its significant presence in the Asia-Pacific region, sets Norton Rose apart from its competitors. Specialising in the legal needs of financial insitutions and services, energy, infrastructure, mining and commodities, technology companies and innovation; and life sciences and health care. Banking, finance, M&A,PERegulatory , Agribusiness and Property cross over.
Norton Rose Fulbright are part of the hand-picked legal panel for many of our clients.
We have found a point of difference above their core competencies and key strengths in that they like to know how their clients’ businesses work and understanding what drives their industries is fundamental to them. Their lawyers share industry knowledge and sector expertise acrossborders, enabling them to support their clients anywhere in the world.
They are particularly strong in financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and health care. Banking, finance, M&A, Equity Capital Markets, Private Equity, Regulatory , Agribusiness and Property cross over.
We both use and recommend Anthony Latimer for our transactions.
Anthony is a corporate partner based in Sydney.
Anthony advises national and international clients and has a particular focus on clients in Asia Pacific (in particular China and Papua New Guinea). Specifically, Anthony has been advising Government enterprises and non-Government enterprises on various transactions and projects mainly in the energy, mining, agriculture and transport sectors.
Anthony’s role has involved advising clients on corporate and commercial matters, including advising on acquisition and merger laws, corporate law including corporate governance, foreign ownership, shareholder arrangements, shareholding issues including buy-backs and reductions, and corporate restructures. Anthony’s roles have included managing complex transactions for clients in respect of the provision of legal services and other professional services.
We have known Anthony for nearly 30 years. In addition to those listed above he has also specifically assisted on many transactions that have included pre IPO investment, property, agricultural and beef cattle in the past, and the knowledge from his family’s own agricultural background is a key strength that underpins his own legal expertise.
Every one that we know has found Anthony extremely diligent and totally committed to his clients, he is in Hong Kong and China regularly, and draws on the Hong Kong office as and when required.
BoxRED BSP LTD HONG KONG
Business Succession Partners Ltd is a Hong Kong firm facilitating outcomes for business owners and business professionals particularly in the Family Office space.
BSP partner with business owners putting in place a succession plan including cost effective access to senior management professionals, independent board level advice and the training and management of future employees.There are no fixed costs or upfront fees ensuring that our interests are 100% aligned with that of the company and BSP offer Recruitment of Senior Management, Succession Planning, Independent advice and consultancy services, Training and Development.
BSP have core competencies in managing assets for family offices , fund of funds, Institutions and HNWIs, sourcing predominantly Asian and emerging market alternative asset management businesses for global investors,investor relations, private equity fund raising and investing private client and institutional money in Europe , MENA, Africa, Asia, and Australia. Substantial hedge funds, analyst and private equity experience, investment and operational due diligence capability, capital raising expertise, portfolio and asset management awareness and a strong Asian network and footprint for The Merkin Group and Australian Securities Exchange listed MDS Financial Group Ltd in Asia and beyond. Founding Partners include a member of the Chartered Institute for Securities and Investment in the UK, and having worked for over ten years as both an investor in and advisor to the owners and senior management of a variety of firms from start-ups to multi-billion dollar public and private companies across 5 continents BSP founders have looked after a broad base of International clients including many family run businesses.
Simon Potter is a founing partner and became a director of a HKX listed financial services company at 28yrs old, in 2011 he was Chairman of the Hedge Funds World Asia and has presented at a number of global investment conferences.
We formed a joint venture with BSP in January 2015 and effectively BSP now operate with BoxRED Corporate under the BoxRED BSP Ltd entity.
REAL PROPERTY MANAGEMENT SERVICES
We cooperate withvarious Australian and NZ based Fund and Asset Managers , Corporate Advisors and b2b and b2c solutions providors in the agribusiness sector.
Our providors provide specialist funds management and asset management services that support the development of new and existing enterprises. We look for partners who have been responsible for managed investments and property portfolios incorporating thousands of investors, on behalf of a range of Responsible Entities and Trustees as well as having managed ancillary services such as investor relations, administration systems and financial management, utilising best practice methodology and leaving clients confident that essential services are being maintained.
Our providors provide corporate-level advice and assistance to clients seeking whole-of-life solutions. Their specialty is on strategic planning and management to assist clients to acquire or restructure assets and enterprises (such as large scale agricultural operations), along with complementary services including corporate finance, risk management and wind-down strategies.
Operating in country our providors work collaboratively with corporate clients, aligning their interests where possible, and in the process turning challenging situations into rewarding outcomes.They cooperate with both The Merkin Group and BoxRED BSP where the respective core competencies,key strengths, geographical, demographical and knowledge footprints complement each others businesses. The principals of our partners and the Merkin Group oftten have commercial relationships dating back to 1999.
For example business services include feasibility studies, due diligence and expert reports, concept planning and analysis, and project management. Our partners assist clients with specific activities to help get a project off the ground, or review and improve progress. Their team’s in-depth industry focus and strong working knowledge of strategy options informs decision-making, ensuring they provide relevant and practical advice.
Our partners also provide advice and assistance to help manage distressed assets and enterprises, with significant experience in the areas of re-financing, insolvency avoidance and business turnaround strategies.
AUSTRALIAN CHAMBER OF COMMERCE HONG KONG & MACAU
The Merkin Group (BoxRED Corporate’s parent) is a corporate member of the Australian Chamber of Commerce Hong Kong and Macau since 2011.
BoxRED is a reciprocal member of all Australian Chambers throughout Asia, including mainland China.
Since 2012 Sean Rothsey has been a Committee Member of the Australian Chamber of Commerce Hong Kong and Macau ’s Finance , Legal and Taxation Committee whose missions include
▪ to communicate to AustCham members relevant financial, legal and tax issues that will impact Australian-related companies doing business in Hong Kong and China and those that will impact their situation as expatriate Australians living in Hong Kong.
▪ to provide networking opportunities for members employed in the financial services industry and to gain greater exposure for Australian businesses with financial service regulators and government agencies in order to enhance the business and regulatory environment.
▪ to provide AustCham members with a series of events that updates them on financial services, legal and tax issues.
Current projects of the Committee include lobbying and awareness for a Double Taxation Treaty between Hong Kong and Australia and mutual funds management recognition.
BoxRED can facilitate introductions to the Chamber , Government , business or professionals in Hong Kong and as a consultant can assist you in an unregulated and unlicensed capacity in a buy sell or other transaction and makes no legal warranties or representations of any kind as to the Buyer, Seller or Transaction. We can also facilitate introductions to licensed entities in a regulated regime where required and can both represent and assist any party in those regimes. Additionally the Finance, Legal and Taxation Committee organizes an annual senior Australians in Finance cocktail party in Hong Kong which ensures excellent networking and market awareness capabilities year round.
OUR INVESTMENT PHILOSOPHY IS TO COMBINE:
Macro thematics in key commodities
A focus on investing into selected stages in the agribusiness life-cycle where we have been consistently successful in the past or see proven risk adverse opportunity in the future
Early identification of the investment potential of a project
An intimate knowledge of Australian and New Zealand Agribusiness industry participants
Our linkages into Asian and Pacific markets, Australian and New Zealand Agribusiness buyers, financiers and investors
Our ability to work collaboratively with investee companies to grow their value, leveraging our experience, expertise and networks
A detailed investment strategy is currently being prepared so as to be available for investors in the proposed The BoxRED Corporate Australian and New Zealand Agribusiness Fund.
Key aspects of our investment strategy include:
Actively growing the value of our investments
We invest into companies with quality projects that have strong potential for superior returns and work collaboratively with investee companies to grow their value and realise their potential. Often our investments are in assets where the intrinsic value is unrecognised, underappreciated or overlooked or sub scale and/or where we can lead the development of these assets to their full potential.
We add value by:
- Providing strategic input and expert support into the sourcing, development, operational or commercial aspects of the investee company and its underlying projects
- Participating on the Board of the investee company
- Assist in lifting the profile and market’s view of the investee company
- Introducing and coordinating strategic, financial or joint venture partners
- Sourcing and coordinating funding for project development and capital expenditure
- Providing access to networks and relationships within Asian and Pacific markets
- If required, providing, or sourcing, management or staff to support the investee company
We would typically seek to invest an amount of a sufficient size to allow us to participate on the Board of Directors of investee companies. We do not intend to participate in the operations of the investee companies but, rather, rely on quality management to operate. We do however bring strong corporate governance and strategic thinking underpinned by risk and compliance awareness and adherence.
Geographic restrictions and diversification
We aim to achieve geographic diversification for the portfolio of investments and will only invest into businesses, regions, or industries where the risks are considered acceptable or manageable. Given the extensive global experience of our team, we are able to effectively evaluate country risks and the prospect of successful investments in a particular country.
We will review investment opportunities where the macro outlook for that commodity is strong, the quality of the project is high and there is strong potential for superior returns. Given our specialist expertise and experience across a comprehensive range of commodities, we are well placed to evaluate and capitalise on a wide range of opportunities.
Stage of investment
We will invest in a diversified range of projects including projects in current production as well as earlier stage (pre-production) assets. Earlier stage projects provide higher growth potential and we seek to mitigate earlier stage risks by leveraging the experience and expertise of our team and other measures referred to under “risk management” below.
We mitigate investment risks through a series of measures including:
- Implementing a stringent and documented investment process
- Performing thorough technical, financial, commercial, legal due diligence on all potential investments
- Investing only in companies or projects whose management has either a proven track record in, or strong potential for, successful Australian and New Zealand Agribusiness development, operations and commercialization.We will however identify and invest in greenfield or brownfield operations where management and or the board have a proven track record in an existing business or other business
- Developing a credible strategy to maximise the growth potential of the investments and the realisation of that potential
- Implementing a diversified portfolio strategy
- Participating on the Board of investee companies
- Investing in companies or projects where management interests are aligned to shareholders and investors
- Employing Australian and New Zealand Agribusiness professionals who specialise in specific commodities and geographies and are able to effectively evaluate technical and infrastructure risks
- Appointing experienced independent executives to the Investment Committee
- Setting concentration limits in connection with any single investment
We have a documented and structured investment process for all investments. In summary, the investment process comprises the following steps.
1. Screen and evaluate investment opportunity
Our team evaluates both public issue and private transactions based upon a number of specific criteria. Some of the key criteria are:
- Macro outlook for the specific commodity
- Country risk including
- Security of asset
- Personal security
- Project factors, including
- Commodity quality and grade
- Project infrastructure and location
- Strategic outlook including
- Australian and New Zealand Agribusiness and growth potential
- Asian and Pacific market and growth potentia
- Benefits of scale
- Benefits of strategic alliances
- Capital cost efficiencies
- Production cost
- Reputational risk
- Key financial metrics, including
- Company valuation
- Ownership analysis
- Projected financial returns
- Quality of management, including
- Technical and operational core competencies
- Track record and potential
- Culture includings ethics and integrity
- Alignment of interests between management and investors, including
- How management is incentivized and remunerated
- Rationale for investment entry
After the initial screening, the investment opportunities are then shortlisted and prioritized. As part of this process the Investment Team may meet with management of the investee company to discuss key issues relating to the company and projects and potential investment entry
2. Initial due diligence
The Investment Team will perform an initial “desktop” due diligence of the investee company and project, in relation to the following aspects, based upon information available and discussions with management:
- Track record and potential
- Culture includings ethics and integrity
3. Initial Investment Committee approval
The Investment Committee will evaluate the investment proposal based upon the initial due diligence performed and investment case submitted by the Investment Team and whether the project should proceed to detailed due diligence.
4. Detailed due diligence
The Investment Team will perform a thorough due diligence of the investee company and the underlying project.
- Technical due diligence
- This will always include a site visit and investigation of the following aspects:
- Site assessments/agribusiness modeling and estimation
- Social & environmental assessment
- Commercial due diligence
- Legal due diligence
- Financial and tax diligence
- Corporate governance
- Human Resource
- Culture includings ethics and integrity
- Independent experts and consultants will be engaged where appropriate.
5. Valuation and structuring of investment
The Investment Team will finalise
- Its valuation of the target company or project
- Financial model and cash flow projections,
- Investment structure
- Terms of investment
The investment opportunity is evaluated in detail by the Investment Team based upon both qualitative and quantitative metrics. This evaluation is documented and becomes the primary input into the Investment Committee decision making process.
6. Investment Committee approval
7. Execute investment
Upon approval, the Investment Team will finalise agreements with the investee company and execute the investment.
One of our core competencies and key strengths is our expertise and experience in performing thorough and comprehensive due diligences on projects across many jurisdictions in the world, including many of the new frontiers for Australian and New Zealand Agribusiness.
The areas covered by our due diligence include:
- Technical and Operational
- Social and community relations
- Financial and taxation
- Management of investee company including corporate governance
- Human Resource
The BoxRED Corporate team possess all the skills and expertise required for completing the due diligence. Where appropriate, external consultants may also be engaged to provide independent opinions.
We view carrying out a thorough due diligence as one of the most important aspects of investing and of our role as an investment manager.
Whilst comprehensive and detailed, our deep experience allows us to complete a thorough due diligence in a timely basis.
We have a comprehensive conflicts management policy and process which includes:
- Continuous disclosure of all investment interests of BoxRED Corporate executives
- All investment opportunities within the target investment range of funds managed by BoxRED Corporate that are seen by BoxRED Corporate executives will be shown to funds managed by BoxRED Corporate and third party clients on a first past the post basis.In actuality we envisage clubbing to result which will benefit all parties.
- An Investor Committee (comprising investor representatives) whose approval is required prior to any investments being made where there is a potential for conflict of interest between Fund investors and BoxRED Corporate
A detailed Conflict Management Policy will be available for investors in the proposed The BoxRED Corporate Australian and New Zealand Agribusiness Fund and to third party clients.
PROPOSED FUNDS 2014
BoxRED Corporate Australian and New Zealand Agribusiness Fund
BoxRED Corporate is the manager of the proposed The BoxRED Corporate Australian and New Zealand Agribusiness Fund (“the Fund”).
The Fund will be a closed ended, unlisted, private equity fund which invests into, and take strategic stakes in, Australian and New Zealand Agribusiness companies and projects consistent with the investment strategy set out in this document. It is available only to wholesale sophisticated and exempt investors.
Third party clients will only be wholesale sophisticated and exempt investors.
The objective of the Fund will be to achieve superior returns for investors leveraging the expertise, experience and networks of our team. The attributes of the Fund’s investment targets typically include:
- Commodities where the macro outlook is strong
- Companies with projects of a high grade and good agribusiness upside potential
- Companies with project cost structures that are in the lower half of relevant cost curves and can withstand commodity price shocks
A management team who have the capability and expertise for successful sourcing, development, operation and commercialisation of the project.
Investors in the proposed The BoxRED Corporate Australian and New Zealand Agribusiness Fund and third party clients will receive research from BoxRED Corporate.