- 1. Investing Into Mankinds Primal Need Diversifying Into
Agriculture to Safeguard and Build Wealth E/W:
[email protected] | www.liquid-investments.com UK OFFICE:
9th Floor, 1 Knightsbridge Green, London, SW1X 7QA BRAZIL OFFICE:
Av Santos Dumont 2828, Sala 1501, Aldeota, Fortaleza, 60150 - 162
UK+44 (0) 20 7084 7421 | USA +1 (347) 647 0127 | BRAZIL +55 (85)
3224 6659
2. About Liquid Investments Founded in 2006 Alternative
Investment specialists in Emerging Markets Focus: Helping clients
to diversify away from the uncertain financial markets in the West
and into Agriculture Commodities in Brazil Brazil 1 3. Experienced
Management A Senior Management Team comprising Investment
Professionals with long standing Markets Experience Global work
experience Europe, CIS, M-East, Far-East raising several Hundred
Million dollars Experience: Deutsche Bank, Santander, Arthur
Andersen, Aon, Spectron Group. In Banking, Investments, HNW
Advisory, Tax Advisory, Commodities Trading 2 4. Know Your Client
We ask our clients what they want, and marry that to what they NEED
We believe that it is ESSENTIAL that clients identify and plan for
their future as there are some very clear threats to their plans
that must be understood and navigated 3 5. Retirement - lifestyle,
retirement date, annuity Education - children or grandchildrens
Aspirations travel, beach house, new car etc Legacy or inheritance
Plan for medical costs that may be encountered in later life What
are YOUR Goals? 4 6. A BASIC retirement for an average American
couple costs $1 million Average medical costs for a couple in the
US - $220,000 Education costs per child up to $520,000 until age 18
and a normal" 4 year degree costs $100,000 (Harvard costs $260,000)
Taking a holiday once a year for 15 years in retirement mounts up
and costs on average $150,000 Monetize YOUR Goals 5 7. Goals Paying
For It Average US couple will need $1 million for retirement
Assuming a conservative 4-5% annual draw-down (pre- inflation,
emergencies) Investing in a tax-free muni bond portfolio, drawing
down $40,000 annually There is a 72% chance nest egg will be
exhausted before you die 6 8. Fertility rates are slowing,
longevity is increasing Between 2013 and 2050 the number of people
globally 65 and older will TRIPLE to 1.5 billion, one-sixth of the
worlds population Inspite of people living longer, average
retirement age throughout the 20th Century remained static at 64
Apart from (adverse) demographics, there are high levels of debt in
developed economies, slowing rates of growth in emerging markets
The Problems Big Picture 7 9. Old Age Dependency Ratio 2.8 3.7 3.7
3.7 3.7 4.2 4.2 4.4 4.5 4.6 4.7 4.9 5.6 6.3 6.8 7.9 8.9 8.9 9.8 9.9
11.2 12.5 1.2 1.5 2.3 2.0 2.4 2.1 2.1 1.9 2.3 2.1 2.6 2.4 2.2 1.5
2.5 2.4 2.5 2.6 3.1 3.2 4.5 6.1 0 2 4 6 8 10 12 14 16 18 20 Japan
Spain Denmark Switzerland United Kingdom OECD Netherlands Czech
Republic Australia Canada United States Russian Ireland Korea Chile
China Mexico Brazil Indonesia Turkey India South Africa Source:
OECD (2011) Old-Age Support Ratio: Number of People of Working Age
(20-64) Per Person of Pension Age (65+) 2008 2050 8 10. Stay
Healthy A recent estimate* states $220,000 will be spent by the
average 65-year old couple for healthcare expenses throughout
retirement The Society of Actuaries estimate a couple retiring at
55 and living to 85 will spend $744,800 on healthcare *Fidelity
Investments 9 11. David Lloyd George (Chancellor of the Exchequer,
1908-15) He was the driver for a well intentioned social experiment
which many of us are paying for today state funded pensions. While
his original system was workable, our modern day system has not
adapted and simply is not affordable No Longer Fit For Purpose 10
12. Work Hard The US government estimates that middle-income
parents of infants born today will spend $242,000 to raise their
child to the age of 18but this excludes college fees, which can be
up to an additional $520,000before university fees are added, a
further $100,000-260,000 = up to $1 million per child 11 13. Adding
Up The Cost Retirement Children Extra $1 million Pension $242,000
Living Expenses $150,000 - Holidays $220,000 Medical Expenses
$520,000 + $260,000 College + University $1.37 million $1.02
million $150,000 = $2.54 million 12 14. Investment Returns Set to
Slide 0% 1% 2% 3% 4% 5% 6% 7% 8% World since 1950 World since 1980
World USA Japan UK Europe Emerging markets Historical high returns
Prospective lower returns Source: Credit Suisse Global Investment
Returns Yearbook 2013 Equities Bonds 13 15. Debt Perspective 14 16.
(The Need For) Diversification Modern Portfolio Theory (MPT) is
used by all fundamentally driven investors A risk management
process whereby different types of investments are blended Result A
collective performance generating higher returns with lower risk
than an individual investment 15 17. Diversification - Video Asset
Class Commodities Currency Products Geopolitics 16 18. MPT Equates
To More Choice 17 17 19. Liquid Investment Theory (LIT) Our
refinement of Modern Portfolio Theory Additional layers of
diversification Uncorrelated investment behavior to mainstream
assets 18 20. Liquid Investment Theory (LIT) Provides additional
layers of diversification Asset Class: a finite resource
Commodities: not correlated with other assets Currency: independent
Products: agricultural, consumer, industrial, pharmaceutical
sectors Geopolitics: 5th largest global economy by 2015, stable
democracy 19 21. Is there more primal urge for humans than to
SURVIVE? They have to feed themselves and their families!
Investment Focus on Agriculture 20 22. Asset class generating
uncorrelated returns compared to other investments Value to rise
due to a widening supply-demand imbalance Why Agriculture? 21 23.
Farmland World-Wide Is Disappearing UN estimate 12 million ha.
being lost on annual basis worldwide Equivalent to all farmland in
California disappearing every 3-years The loss is permanent and due
to deforestation, chemical usage, livestock overgrazing and the
impact of global warming 22 24. Its Getting Crowded 1960 2011 World
52.58 70.54 US 69.77 75.04 Brazil 54.69 73.35 China 43.47 75.04
India 41.38 65.96 Source: IMF 2012 7.2 billion people in 2013 to 10
billion in 2050 Protein rich diets throughout emerging markets Life
expectancy is rising 23 Life Expectancy (years) 25. Population
Forecast 0 2 4 6 8 10 12 14 16 1950 1980 2013 2050 2100 Billion
Source: Population Division of the Department of Economic and
Social Affairs of the United Nations Secretariat (2013) World
Population, 1950-2100 Africa Asia Europe Latin America and the
Caribbean Northern America Oceania 24 26. 70% expansion in global
food production will be required (FAO) Forecasted 60% real increase
in food pricing Other factors driving price increases include
rising costs of fertilizers and energy, the impact of climate
change and the rising biofuel demand A Primal Need 99.6 72.6 63.0
71.9 62.1 70.6 0 20 40 60 80 100 120 (%) Source: Bank of America
Merrill Lynch Agricultural Land Price Appreciation in Brazil,
2010-2013 25 27. Illustrious Investors get a Lamborghini dealership
in Oklahoma or in Nebraska because farmers are going to be driving
the Lamborghinis Jim Rogers Other investors George Soros, key
pension institutions such as TIAA- CREF, firms like BlackRock,
Morgan Stanley and large and influential sovereign wealth funds
such as the China Investment Corporation and Temasek (Singapore) 26
28. Recent Farmland Purchases in Brazil Investor Origin Area, ha.
Use of Farmland Cresud Argentina 175,000 Cattle, Crops, Sugarcane
El Tejar Argentina 220,000 Cereals, Oilseeds Chongqing Grain Group
China 200,000 Soybean Pengxin Group China 200,000 Cotton, Soybean
Louis Dreyfus France 250,000 Sugarcane Aquila Germany 250,000
Cattle, Sugar Shree Renuka Sugars India 133,000 Sugarcane Adecoagro
US 165,000 Cattle, Coffee, Grains, Soybean, Sugarcane TIAA-CREF
Retirement Equity Fund US 424,000 Soybean, Sugarcane Tiba Agro US
320,000 n/a 27 29. Best of the BRICs 28 More to offer than guns and
oil unlike RUSSIA No ethnic/religious tensions or hostile neighbors
unlike INDIA A democracy unlike CHINA BRAZIL - Largest reserves of
freshwater globally, 329 million ha. of rich arable land and the
largest tropical forests responsible for generating 20% of the
worlds oxygen, set to be the worlds number one producer of food by
2020. 30. Why Brazil (1) 57 40 35 28 25 24 18 16 16 14 14 8 6 3 0
10 20 30 40 50 60 Orange Juice Coffee Oranges Soybean Ethanol Sugar
Cattle Poultry Beef&Veal Iron Ore Bauxite Cotton Milk Crude Oil
Source: Santander % of World Production From Brazil 29 31. Why
Brazil (2) 6th largest global economy, 5th largest by 2015 5th
largest consumer market by 2020 4th largest global recipient of FDI
in 2012 FX reserves equivalent to the rest of the continent
combined 19 23 26 27 40 44 47 49 54 59 63 65 73 120 147 0 50 100
150 200 Belgium Luxembourg Chile India Ireland Russia Canada
Australia Singapore France UK Brazil Hong Kong China USA Source:
United Nations Conference on Trade and Development (UNCTAD)
US$Billion 30 Global FDI Ranking, 2012 32. Diversification Modern
Portfolio Theory Liquid Investment Theory Agriculture Brazil The
Road to Brazil Asset Security and Profit Potential 31 33. A
Reversion to Mean 32 34. 2 reasons it is of particular interest to
us: 1. All parts can be processes 2. Current supply-demand
imbalance Fastest growing markets: Coconut Water Activated Carbon
Coconut Oil Biofuels The Humble Coconut 33 35. Coconuts in Brazil 0
20 40 60 80 100 120 Brazil India Indonesia Philippines Sri Lanka
Thailand High levels of agrarian R&D in Brazil Highest yielding
coconut producer globally 34 Coconut Yield by Country (000 hg/ha.)
36. Coconut Plantation Video 37. Global Organic Food & Beverage
market size forecast at $105 billion in 2015, a doubling in 5 years
Organics already account for 4% of total US food sales and forecast
to grow by 14% between 2013-18 The Organic Potential 36 38. Coconut
Plantation Key Financials Return on Investments between 11- 40%
Projected IRR to yield up to 18% over twenty years Option to
purchase immediate earnings stream at Fazenda Santa Rita 37 39. The
Tree of the 21st Century Indigenous to Asia Effective natural
bio-pesticide A non-synthetic method of disease and bacteria
suppression The Attraction of Neem 38 40. Neem Plantation Video 41.
A wholesale exodus out of antibiotic development by Big Pharma.
over the past 15 years Neem A Weapon for the Post-antibiotic Era 16
14 10 7 4 2 0 2 4 6 8 10 12 14 16 18 1983-1987 1988-1992 1993-1997
1998-2002 2003-2007 2008-2012 NumberofAntibacterialNewDrugApprovals
Source: FDA's Center for Drug Evaluation and Research (CDER)
Antibacterial New Drug Approvals 40 42. Neem Plantation Key
Financials Return on Investments between 11-44% Projected IRR to
yield up to 20% over twenty years Crop care included for the first
five years 41 43. The Importance of Asset Choice Travelling from
the US to China in 48 hours? However hard you tried on your
bicycle, you are just not going to get there. The only guaranteed
way is by jet plane. The same applies to investments make sure you
choose the right assets to get the job done 42 44. E/W:
[email protected] | www.liquid-investments.com UK OFFICE:
9th Floor, 1 Knightsbridge Green, London, SW1X 7QA BRAZIL OFFICE:
Av Santos Dumont 2828, Sala 1501, Aldeota, Fortaleza, 60150 - 162
UK+44 (0) 20 7084 7421 | USA +1 (347) 647 0127 | BRAZIL +55 (85)
3224 6659 Thank You For Your Attention 43