Research house Adviser Edge has joined forces with BDO Kendalls Wealth Management and BDM Direct to launch an agribusiness portfolio construction tool.
Called AgriBlend, the online service enables an adviser to build a risk-rated agribusiness portfolio using Adviser Edge-rated projects or findings from other independent research houses.
The projects are classified into one of three risk/return categories — balanced, growth and high growth — based on the rating they have achieved.
The adviser determines the client’s risk profile based on their internal risk assessment procedures to match this to the agribusiness investments.
AgriBlend also has online cashflow calculators to help advisers with the client’s investment expenditure.
Adviser Edge managing director Shane Kelly said the collapse of Timbercorp has meant advisers need to assess how agribusiness will fit into portfolios.
“Advisers can no longer afford to ignore the need to diversify investor exposure when it comes to agribusiness,” he said.
“I have been very concerned about investment concentration in the managed investment scheme (MIS) retail market, particularly in the so-called ‘captured markets’ favoured by companies such as Timbercorp.”
Kelly said this was the reasoning behind developing AgriBlend as a tool to help advisers shield their clients from crisis events such as drought, market failure or manager insolvency.
“Using AgriBlend to diversify investment across four critical areas, advisers can reduce the volatility of a client’s agribusiness portfolio,” he said.
“It is well accepted that ‘real agribusiness’ has a low to negative correlation to mainstream asset classes such as equities and property.
“By allocating a proportion of a portfolio to agribusiness, investors have the potential to capture these diversification benefits.”
BDO Kendalls Wealth Management director Michael Bugelly said dealer groups will be able to build agribusiness portfolios based on their approved list.
“Each AgriBlend portfolio will gain an Adviser Edge star rating, which considers the diversification benefits of each blend of projects,” he said.
“The rating gives consideration to the benefits of investing across a range of managers, industries, markets and locations.”
To head up distribution of the product will be newly appointed alliances and relationships manager Vicki Massey, who will work with BDM Direct’s national business development team.
Massey was formerly an HLB Mann Judd Corporate Finance principal and FEA Plantations Victorian marketing manager.
