Thursday, 11 February 2016
Last updated 12 hours ago
May 2 2011 | 1:40pm ET
Two agribusiness giants are dipping their toes into alternative investments.
Archer Daniels Midland and Continental Grain have both launched funds making agricultural investments. The former's ADM Investor Services brokerage unit is readying a fund of commodity trading advisors, while the latter's Arlon Group has begun fundraising for agriculture-linked funds investing in commodities, private equity and stocks.
Both firms may be using larger rival Cargill Inc. as a model: Cargill began fundraising for its Black River Asset Management commodity hedge fund unit last year.
"It's just another way to leverage our knowledge in a slightly different business model," Arlon's Matthew Keegan told Bloomberg News. "You start to collect fees and revenues based on managing assets rather than by crushing soybeans or transporting grains."
Arlon is also planning to raise outside money for its $300 million Arlon Food & Agriculture Partners private-equity fund.
ADM Investor Services filed a private placement notice with the Securities and Exchange Commission on April 15. The new fund will invest in a set of CTAs trading interest rates, currencies and agricultural and energy commodities. ADM Investor Services President Thomas Kadlec told FINalternatives the fund will be monitored by an investment committee made up of Balarie Capital Management chief Emanuel Balarie, Jack Schwager and members of ADM Investor Services' senior management team
The new fund will offer diversified exposure to a basket of commodity trading advisors.