Opportunity set

INOKS Capital enables investors to capture sustained value from a combination of strategic and tactical market opportunities:

  • World population is increasing
  • Food prices tend to rise for essentials
  • Big financing gap to reach SDGs Goals
  • Limited fertile and usable land for agriculture production
  • Traditional “financiers” are capital constraint
  • Selected EM countries are world leaders in the production of Agri products (i.e. Ukraine No 1 producer for Sunflowers or Ivory Coast No 1 producer of Cocoa).

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GENERAL DESCRIPTION

  • The strategy focuses on Agri/Food transactions which are profiting from inelastic demand characteristics and serving people’s basic nutritious needs (wheat, corn, rice, cocoa, sugar, vegoils, etc.).

Fodder Crops, Fresh Produce, Grains, API Bio Pharma, Crop Inputs, Meat, Oilseeds and By-Products, Processed Food, Softs Edible, Soft Non-Edible

  • Facilities are structured according to a specific funding rationale matching the natural cash cycle of the activity. Financing agreement is entered only if several steps are financed.

  • The strategy is non-directional and seeks to mitigate market and non-market risks with mitigants and transfers overlays. This is coupled with direct top-down research driven sourcing, hands-on pre-investment due diligence and post-investment transaction monitoring.

  • INOKS Capital invests (i) responsibly by seeking its investments’ ESG compliance with IFC Performance Standards, (ii) and impactfully by aiming at positive externalities along 4 Impact Themes covering 6 Sustainable Development Goals (https://www.inokscapital.ch/impact-at-inoks/).

  • This unique unleveraged approach targets resilient, low volatile and uncorrelated returns. It is thus an attractive tool for enhanced portfolio diversification and stabilization within a well-balanced portfolio.

EXAMPLE OF COMPANY FINANCED BY INOKS CAPITAL

Underlying Business & Financing Transaction

Business: Grains & Specialty Crops Local or Export Value Chains adopting  Sustainable & Precision Farming Practices

Country: Ukraine

Financing Transaction:

  • Funding spans from purchase of the inputs, farming to distribution/export
  • Sold on local and export markets at best market pricing

Key Criteria/Terms

  • USD7.5M Exposure
  • 360 days maximum commitment
  • 9.5% Gross Margin
  • 120% Cover Ratio
  • Payment of COGS (i.e. cost of producing to delivery) as and when occurring in the value chain
  • Commodity Price and FX risk mitigated (not directional)

Risk Management Toolset (amongst other)

  • Independent Collateral Monitoring/Management Company
  • Crops are pre-sold
  • Collateral package of fixed assets, crops, inventories and resulting assigned receivables under the direct control of the Fund
  • Insurances used to protect the crops (weather/peril) and the assets (fixed asset and Inventory) amongst other risk transfers (theft, war, riot, social unrest, etc..)

Impact Targets

  • Increase sustainable/organic farming
  • Improve soil conservation
  • Mitigate climate change by reducing emissions with precision farming and rail inland transport whenever available
  • Support 600 high value agronomic local job
  • Support more efficient local logistic chain 
  • Improve high quality food availability through yield optimization, both local and export for the surplus