The remaining players in the shrinking agribusiness managed investment scheme (MIS) sector appear to have ramped up investor protection, providing more clarity about the structure of their products in a bid to win back investor and adviser confidence.
As reported in Money Management earlier this month, the managing director of the researcher Adviser Edge, Shane Kelly (pictured), has noted the trend, saying product providers were working towards ensuring the projects actually reached their conclusions regardless of the financial situation of the manager.
One such player is Macquarie Agricultural Funds Management, which introduced the so-called security accounts as well as the direct ownership of assets such as trees and land.
Executive director Anthony Abraham said it was up to fund managers to engage retail clients and provide them with confidence that their investments were sustainable, due to their long-term nature.
He added investors needed to regard agribusiness managed funds just like any other financial products.
“They have to look at the product structure and investor security … how it works and whether the outcomes are achievable,” Abraham said.
The introduction of Macquarie’s security accounts is the major development in its agribusiness funds management since the collapse of companies such as the Great Southern and Timbercorp over two years ago.
Abrahams said those accounts would be set up on day one with the money remaining there for the duration of the project. He said fund managers could not force their clients to insure their investment, although the Australian Taxation Office highly recommends insurance for agri-MIS.
“You’ve got to know who owns the land, you’ve got to know what rights the investor has, you want to know how the land is funded … and be comfortable,” Abrahams added.
Another player in the market that has been offering and advocating for direct ownership of assets is Almond Investors. However, executive director Wayne Overall predicted the retail inflows would not go back to pre-2009 levels any time soon.
A certain amount of time needed to elapse before retail investors started considering agri-MISs again, he added
