Former JBS launches fund targeting agribusiness – 05/15/2023 – Panel SA

Funds backed by agribusiness are considered a new frontier in the investment industry, still concentrated in the energy sector. It is on this new front that the recently created Verus, a hedge fund [proteção] commanded by the Brazilian Marco Sampaio, who collaborated for almost two decades in the process of internationalization of JBS, and Greg Bechtel, who led Bunge’s grain operations in North America.

What is so promising about Brazil for this type of business? There is an opportunity with the growth of agro and biodiesel. At the time of the opening of China, and ethanol, we saw level 3 opportunities on a scale of 0 to 10. With biodiesel, the opportunity went beyond this limit.

Why are energy-related funds able to move more than agribusiness funds today? Until 2014, the funds [de investimento] of agriculture commodities represented almost 40% of the total [negociado pelo mercado]. Energy was 30% to 40%. Today, energy remains at the same 40% and agro, less than 10%. We are seeing a very big opportunity with renewables [combustíveis].

Why dollarize all the fund’s investments? It’s a hedge [proteção] against inflation as well. Every time there is a lot of inflation in the world, people rush to commodities.

What are your goals? We already have more or less US$ 250 million invested. Our intention is to triple the size of the fund and we want to do this specifically in Brazil.

It would be easier to get US institutional investors, giants like BlackRock, which for them to invest US$ 250 million is a very small part of the portfolio. We don’t want to be a huge fund because it makes it harder to return. The commodities market, specifically agriculture, is not that big on the stock exchange. When we reach US$ 750 million, the idea is to close it for investments. The biggest fund today, in the United States, must have US$ 1.5 billion. Are we going to compete with this type of fund? Yes. But we are also going to compete with Citadel, with BlackRock, who are not just focused on commodities.

So they look for farmers fundamentally? We want an investor who takes risk in agriculture. I have an acquaintance with a lot of soybeans who leased the land to a third party. He said “Wow, I had an income of x, but now it will be an income of x minus 30% because soybeans have plummeted in Brazil. How am I going to hedge this risk?” With us he manages to protect his income.

Who has already shown interest? Let’s talk to family offices, with highly capitalized Brazilian producers. We have some interested parties in the Midwest. Meetings start this week.

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Marco Barros Sampaio holds a degree in Business Administration from Lynn University and began his career as a commodities trader at Cargill in 1997. Five years later, he migrated to JBS, where he served as the company’s head of risk, accompanying the transformation of one of the largest companies of food in the world. He founded Verus Commodities in December 2022.

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