Sometimes it is better to replicate what works than to innovate without a clear and viable idea, and, as we previously mentioned in our blog, not only in the field of entrepreneurship. Spanish investors have also set their sights on the U.S. market, gradually investing in investment trends already consolidated overseas. Two weeks ago, we discussed house flipping. Today, however, we would like to introduce you to a new investment trend that will probably catch your eye due to its focus on the millennial sector.
The origin of this sector dates back approximately 10,000 years ago! When humans became sedentary, “economic activity” began and became what we know today as the agricultural sector. However, the term “economy” in the age of barter could be considered an anachronism. The timeline seems to bring investors back to the primary sector as if it were a wheel. In the last two years, we have witnessed a remarkable boom in the agricultural market regarding investment.
Technology is the key
This sector, however, has changed considerably since its inception, becoming more agrotech than agribusiness. The technology reached this sector, introducing significant improvements in efficiency and quality. For example, super-intensive cultivation (100% mechanized harvesting) has improved productivity in recent years. Likewise, organic crops are currently in vogue, allowing the production of organic foodstuffs in a more environmentally friendly way.
These agricultural sector improvements have made it a particularly potential opportunity for investors looking for high returns (up to 10% in Spain) and low-risk levels. The prices paid to invest in the sector in California or Australia are twice as high as in Spain, making the Spanish market particularly attractive for agricultural investment opportunities.
Interestingly, the two new investment trends we are discussing this month (real estate and agriculture) share a common factor: population growth. Whereas more Real Estate will be needed in the future to accommodate a growing population, the agricultural sector will also have to adapt. According to the report Agribusiness in the Iberian Peninsula, published by CBRE, “It is estimated that food production will have to grow by 60 to 70% to feed the world’s population by 2050, 9 billion people”.
Which investors are interested in the agricultural sector?
Given all these advances and expansion prospects in the sector, many investors are looking to invest in this sector. Either by acquiring farms directly (we are at the highest levels of counter-sales in the last fifteen years) or by participating through other formulas such as equity crowdfunding. Family offices (asset management companies channeling family fortunes) are one example. They are joined by private equity funds, usually seeking an exit within a ten-year time horizon.
Agribusiness investment has also attracted the attention of pension funds and insurance companies, seeking a fixed return and no risk exposure. Many agricultural plantations, such as almond trees, have a stable quantity and price demand. For this reason, an insurance policy against unforeseen events in these plantations can minimize the risks of this investment to the maximum.
Fellow Funders is always striving to find the best trends and investment opportunities. For this reason, we joined Alboris Mancha, a trusted company with which we launched a round for the production of olive oil, to jump on the bandwagon and bet on the primary sector.
Invest in the agro sector!
We have recently launched a second round with Alboris Mancha, aimed at cultivating organic almond trees in a super-intensive regime. Our investment is backed by agricultural insurance that minimizes investment risks and will produce annual dividends. The round received a great welcome. For this reason, we created a waiting list. We do not want anyone to be out of this project! Invest in the agricultural sector and join the Alboris project!
