Investment Management

MANAGING REAL ASSETS FOR REAL RETURNS

Folium Capital’s highly experienced team has more than a century of shared investment expertise and manages more than USD 1B in assets across multiple portfolios. All of our investments benefit from proprietary risk analysis, deep operational proficiency, and a time-tested approach to finding acquisitions outside of the mainstream and selling opportunistically after asset management goals are achieved.

Our network of local operating partners brings trusted property management experience in the regions where we invest and actionable insight to many of our potential investment opportunities.

INVESTMENT APPROACH

    • Identify sectors with scarce capital and technical expertise.

    • Access deals, especially off-market, by leveraging local networks.

    • Favor Greenfield/developments when mature assets are valued at a premium and/or when returns are enhanced by carbon potential.

    • Focus on crops and species with attractive forecasted supply/demand balance, high entry barriers, or long lead times for supply response.

    • At acquisition, underwrite steady market discount rate for duration of investment.

    • Underwrite conservative pricing in uncertain carbon markets.

    • Partner with local operators with proven track records.

    • Direct operational decision-making and promote continual improvement and application of best practices.

    • Employ science-based nutritional, genetic, and irrigation regimes for economic efficiency and environmental performance.

    • Unlock land and water value by combining them into highly productive systems worth more than the separate components.

    • Utilize innovative remote sensing capabilities from acquisition and ongoing management through disposition.

    • Define, measure and report on all relevant environmental, social and governance performance metrics.

    • Focus on strategies in regions with optimal climate and infrastructure to grow our high conviction crops and species.

    • Favor regions where Folium has experience and understands the local operating, legal and tax environment.

    • Favor irrigated crops, tree species, and locations that reduce climate risk and anticipate climate change

    • Concentrate in crops and species with main exposure to dollarized export markets to reduce currency risk.

    • Holding land and water creates optionality over time.

    • Plan for a long-term hold but remain watchful for earlier exit opportunities at the right price.

    • Recognize optimal sales points during the investment life when discount rates compress.

forests

STRATEGY & APPROACH

Fast-growing species in established markets with a focus on developing new plantations.

KEY ASSET CLASS ATTRIBUTES

• Forest investments generally exhibit low correlation with other asset classes

• Expected to provide a hedge against inflation and offer downside protection in quality real asset holdings.

• Folium believes the asset class offers an attractive return and a high Sharpe ratio.

Core Elements of the forest strategy

• Potential for the dual demand on forests to increase both carbon and timber prices

• Greenfield and young forests will best position the fund to tap into the growing return potential and enhanced liquidity from carbon markets

• Focus on species with attractive supply/demand fundamentals and on forests within logistical range of mills and ports to allow for the economically viable harvest and sale of timber:

- Underpins investments with potential for solid timber-only returns such that they are not solely reliant on carbon markets

- Allows for access to dollarized markets to reduce currency risk

• While carbon markets are growing strongly and seem destined to continue that growth in both traded volume and price – we underwrite future carbon pricing to reflect expected growth, but avoid the most speculative projections which rely on uncertain political support

• Focus on species with the right balance of forest products supply/demand fundamentals and carbon potential. Folium has developed core expertise in plantation management techniques for certain niche tree species

High Conviction SPECIES

- Eucalyptus, pine, sandalwood, teak, and other high value durable timber species

agriculture

STRATEGY & APPROACH

Irrigated orchards and vineyards with a focus on development of new orchards from land and water being underutilized today.

KEY ASSET CLASS ATTRIBUTES

• Agriculture investments generally exhibit low correlation with other asset classes

• Expected to provide a hedge against inflation and offer downside protection in quality real asset holdings

• Folium believes the asset class offers an attractive return and a high Sharpe ratio

Core Elements of the agriculture strategy

• Capital intensity of Folium’s strategy creates barriers to entry not seen in other parts of agriculture

• Ability to combine land, water rights, and water infrastructure delivers early value uplift

• Global middle-class growth is expected to cause demand for many fruit and nut crops to grow faster than GDP

• Demand supported by:

- Globalization of food tastes

- Growing demand for healthy plant-based foods

- Year-round availability supplied from counter-seasonal sources

High Conviction crops

• Focus on species with the right balance of forest products supply/demand fundamentals and carbon potential. Folium has developed core expertise in plantation management techniques for certain niche tree species

- Almonds, apples, avocados, blueberries, cherries, citrus, hazelnuts, kiwifruit, olives, pecans, walnuts, wine grapes