Advising a European Asset Manager on Agriculture & Biofuel Risks

Date: 2014-2015

Overview

We advised a European asset manager on investments in agriculture and biofuels. Our analysis of a biofuel plantation in Paraguay’s Chaco region revealed significant risks, including delays due to community opposition and ties to deforestation in indigenous and protected areas. The management team lacked local connections, making it hard to build trust with communities, further compounding the risk. The uncertainty of crop maturity and market demand made potential delays even more critical.

Key results

After reviewing the risks, we advised the client to hold off on the investment. This decision paid off, as both the plantation and biofuel markets later faced significant challenges.

Lessons learned

Data-driven insights into social and environmental risks can strongly influence investor decisions, helping them avoid costly mistakes and steer clear of underdeveloped projects.