Schemes fail litmus test
Less than one in ten agribusiness investment schemes on the market passed analysis by van Eyk Capital this year.
The subsidiary of van Eyk Research recommended only 5 out of the 73 tax-effective investment projects submitted to them last February.
Van Eyk Capital managing director David Marshall told yesterday's Advanced Taxation & Super Strategies conference that agribusiness will one day be a viable alternative asset class, however, there needs to be more balance for the industry to move forward.
He says of the 68 ASIC approved prospectuses which failed van Eyk's analysis, many are start-ups with no liquidity apart from generated cash flow.
Marshall says a balance between risk, reward and a sustainable business sector is required for a tax-effective investment or it can not be sustained in the long or even medium term.
The project's manager also comes under close assessment under van Eyk Capital's analysis, including technical skills and specific industry experience.
Marshall says he has spoken to many managers who don't have marketing knowledge or contacts in the industry. He says if management is not top quality, the tax scheme can be more easily attacked.
"A manager has got to have financial strength and a good reputation," he says.
Other tax-effective agribusiness investments failed to pass the growing location assessment, with the inability of gaining secured water one of the main problems.
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
