Emphasis on agribusiness at van Eyk

Van Eyk Researchhas added another consultant to its agribusiness division, van Eyk Capital, with Dr Peter Dry now assisting analysis in the firm’s annual agribusiness reviews.

The research house says the appointment of the additional consultant, who is based in Adelaide, comes at a time when the agribusiness sector is receiving increased attention from investors.

Van Eyk Capital director Harry Sookias says the sector continues to attract investor interest because of its potential for generating high-income returns and substantial initial tax benefits.

“We believe there is a strong business case for this sector, especially in the current environment where investors are asking for a recurring income stream that is lowly correlated with traditional asset classes,” Sookias says.

In addition to specialised agricultural and scientific input, Dry’s role will also involve conducting periodic site visits to potential investee schemes.

Sookias says that he and Dry will also be assisted by a range of independent consultants and other in-house capabilities.

Late last month van Eyk Research and theAustralian Securities and Investments Commission(ASIC) met with financial planners in Sydney to combat a negative market perception towards agribusiness products.

ASIC is planning to crack down on the misuse of long range financial forecasts in prospectuses and product disclosure statements (PDSs), focusing on a selection of prospectuses and PDSs typically relating to agricultural schemes involving crops with long life-cycles.

ASIC’s concern is that promoters may be using highly speculative long-range information to entice investors, while lacking the reasonable grounds to back up their claims, and would like to see the use of long term forecasts abolished.

Van Eyk Capital, however, disagrees with this stance.

“Our view is that this will produce two classes of investors, those who do look at the forecasts, and then the retail clients who will now be without that. That’s not very good in increasing transparency,” Sookias says.

Sookias says the research house discussed the issue with the regulators, who he says took the criticisms on board and were “very rational” about the issue.

“ASIC has been pretty active over the last 12 months in reviewing the sector and trying to clean it up. The seminar was well received, partly because the industry regulator was there saying that they weren’t against agribusiness projects per se, but just wanted to improve transparency in the sector, and make it a safer place for retail investors to invest,” Sookias says.

Van Eyk Capital provides research on agricultural investments including the plantation timber sector, vineyards, fruit orchards, olives and almonds.