Tag Archives: irish
New Funds: October 21
http://www.ft.com/cms/s/0/4dc5971c-374a-11e3-b42e-00144feab7de.html#ixzz2iXVJIIAx ● US fund house Legg Mason Global Asset Management has launched the Legg Mason Western Asset Senior Loans fund to provide exposure to debt securities and non-investment grade loans. ● UK fund company Schroders has launched a new catastrophe bond fund, the Schroder GAIA Cat Bond fund, on its Luxembourg-domiciled Ucits platform, to invest in regions with a high concentration of insured wealth. ● Natixis Asset Management has unveiled the Natixis Global Risk Parity fund, which will invest in a wide range of asset classes, from equities to commodities, real estate and emerging market debt. ● Willstone Management, a UK-based art investment company, has obtained $100m from two New York hedge funds to launch what it claims is the first sizeable dedicated art-lending business for Europe. ● Three seasoned activist investors, Blake Nixon, Max Lesser and Christopher Mills, have joined forces to launch investment vehicle Worsley Investors as part of a new venture, Worsley Asset Management. The fund will take strategic holdings in UK small-cap companies that are trading at deep discounts to their latent value. ● Baring Asset Management is to launch the Baring European Opportunities fund to invest in smaller European companies, which it believes are substantially under-researched compared to larger cap stocks. ● AXA is expanding its €3bn smart beta range with the launch of the AXA WF Global SmartBeta Equity, a Luxembourg-domiciled Sicav. ● BlackRock’s ETF arm, iShares, has created a range of five ultra-short and short-duration bond ETFs designed as alternatives to money market funds. The ETFs, which are the first passive products in this space in Europe, carry total expense ratios between 20 and 45bp. ● FinEx has launched a physically backed gold ETF on the Irish Stock Exchange, which will be cross-listed in Moscow in a bid to drive the development of the Russian ETF industry. Continue reading
Banks Rediscover Love Of Solid But Dull Agri-Sector
Darragh McCullough – 17 October 2013 ‘You couldn’t walk a yard without hearing a fellow giving out about being turned down for a bank loan.” This was a typical comment at agricultural shows in recent years – until this year, that is. Several observers noted how little conversation the banks were generating at the Ploughing Championships this year. That’s a good sign. When the crunch came in 2008, every business was indiscriminately caught up in the paralysis that subsequently struck the banks. Solid agri-enterprises that had long-standing relationships with their bankers suddenly found their overdraft facilities being slashed and interminable delays in getting loans approved. Of course, farms were being treated no worse than any other business. There was also a small bubble of borrowing to be washed out of the agri-sector. The massive Farm Waste Management scheme that grant-aided a shed-building spree to the tune of 40pc led to a 25pc spike in overall borrowing in the sector for four short years. That has now fallen back to €4.5bn, according to the Central Bank. But the check in activity is much less pronounced than that in almost every other sector. Recent figures from the Economic and Social Research Institute (ESRI) show that while lending to the agri-sector has fallen by 12pc since 2010, the equivalent figure for hotels, construction, retail, transport and professional services are all multiples of this value. Only manufacturing, with a fall of 7pc, had a lower value than agriculture. At least part of the reason for this is the general ramping up of the value and volume of output from Irish farms in the last few years. Booming food commodity prices are encouraging farmers to invest. Banks have suddenly rediscovered their love of the solid, if slightly dull, assets that underpin the sector. ESRI research shows that the agri-sector had the lowest rate of credit refusal, compared to any other. Indeed, it appears that farmers are enjoying some of the cosiest arrangements going in terms of their financing facilities. They paid the lowest rates of interest at an average 3.7pc, compared to 5.9pc for professional services, according to the ESRI report. “We suspect that this is due to the abundance of collateral these firms can offer as security in the form of both farmland and equipment as well as to the availability of risk-free income streams through EU subsidy supports,” commented the ESRI researchers. The average farm loan currently stands at €78,000, but in reality a huge proportion of farms have no borrowings at all. It is only the intensive pig, poultry, cereal, fruit and vegetable growers along with dairy and a handful of beef farmers that have the cashflows to allow any form of regular borrowing. The dairy sector is the one that interests the banks most at the moment, with 18,000 operators, most of whom are viable operations with one eye on expansion when quotas go in 2015. Bankers know that indebtedness on most dairy farms is relatively low. A good farmer can handle borrowings of €4,000 per cow. In other dairy nations, both inside and outside the EU, the figure is often a multiple of this. So the Irish dairy farmer is a good bet. He’s the guy out there buying land at €10,000 an acre and securing loans at interest rates of 3.7pc. There is some concern about a possible dairy bubble forming on the back of the record prices that farmers are getting for their milk at the moment. The only hope is that our bankers have learned their lessons from the last party. Irish Independent Continue reading
EU Vote Bursts Bubble On Biofuel Future
DARAGH MCCULLOUGH – 29 AUGUST 2013 A recent vote by EU politicians makes the future of the nascent biofuel sector here even more precarious than it already was. A decade ago we were told that the world had entered a new post-peak oil era. With dwindling supplies, countries needed to take action to secure new sustainable sources of energy. Ireland was as good a case for bioenergy as anywhere, spending €6bn annually on imported energy. Everybody wanted a slice of that action. So ambitious targets obliging us to have 20pc of our total energy requirements coming from renewable sources by 2020 were signed into law. The Government pumped millions into schemes to incentivise farmers to grow new biomass crops such as elephant grass and put up oil-pressing plants. To the delight of the sceptics, much of this endeavour appears to be unravelling at the seams. Yes, wind-farms continue to be constructed and solar-panels adorn more and more roof-tops. But hundreds of acres of elephant grass, or ‘miscanthus’ to give it its proper name, have already been ploughed in by disillusioned farmers. The more enterprising individuals that invested millions in briquetting and oil-pressing plants have lost their shirts on the enterprises as market reality kicked in. Fossil fuels are becoming more expensive, but we are becoming more efficient at using them and extracting them. The actual end-game in terms of supplies is still so far off that the market still doesn’t price it into the equation. Irish farmers discovered to their cost that the rest of the planet is also able to generate masses of biomass – and ship it in here at a fraction of the cost that the Irish farmer needs to make a profit. Waste by-products such as palm kernals and cocoa shells are available for virtually nothing. The countries that produce these often can’t produce beef or milk at the same cost that we can in Ireland. Farmers and policymakers momentarily lost sight of what they had – a real competitive advantage in producing. At the same time, policymakers are still confused as to whether growing crops to fuel our cars actually makes sense. As a result, after their initial wave of enthusiasm, European politicians are slowing coming around to the idea that promoting the production of biomass and biofuels may not be the best use of our taxes. “Biofuels increase the demand for crops, which can encourage, at a global level, putting land into production, land that might not otherwise be used. And greater demand can lead to higher prices for food, hitting the poor hardest,” said Ireland East MEP Mairead McGuinness . As a result the EU recently voted to cap the amount of biofuel that can come from food sources at 5.5pc. But experts in Teagasc still believe that there is a future in the sector for those willing to take the risk. “We had to start somewhere in our search for alternatives to fossil fuels,” said renewable energy specialist Barry Caslin. “Growing miscanthus and oilseed rape crops to simply burn for heat is first generation stuff. Algae, waste digesters and enzymes are part of the second generation, and at some point we will be growing fuel in sustainable ways that is competitive with fossil fuels,” he said. In the meantime, Mr Caslin believes that Ireland is losing out on investment, jobs and economic growth if the Government doesn’t continue to support the advancement of the sector. It’s a classic case of the chicken and egg. Should we continue subsidising the development of renewable energy sources or should we wait until the market can support the development of the sector itself? Time will tell. Irish Independent Continue reading
