Macquarie Agricultural Funds Management has fine-tuned the features included in its offerings for 2011 adding a new security measure aimed at rebuilding investor confidence in the asset class.
"Some of the issues that have happened in the past when the promoter has gone down is the money to plant the trees wasn't there, the money to maintain the trees wasn't there, so they had to go back to investors, and when there were rental arrangements there wasn't the money to pay the rent," Macquarie Agricultural Funds Management executive director Anthony Abraham said.
To protect investors from this scenario, Macquarie is now setting up security accounts for both its 2011 Forestry Investment and Almond Investment products.
"God forbid anything should happen to us, this money would take us through to the end of time," Abraham explained.
"If people are going to re-engage, they need confidence and we need to give people the confidence that these projects can continue regardless of whether the promoter is there," he added.
Macquarie specifically sets its own funds aside to provide the new security account structure.
The 2011 Forestry Investment has a maturity term of 11.5 years. Potential tax deductions are available for 100 per cent of the application fee on the tree project and financing for 100 per cent of the cost of the investment is also available. Applications for this fund close on 30 June.
The 2011 Almond Investment operates in a manner where the investor pays the expenses and receives the revenue on a year-by-year basis. Again, a tax deduction of 100 per cent of the upfront and ongoing costs is potentially available and investors can fund 100 per cent of the application amount through gearing. Applications for this fund closes on 15 June.
"These are products we are really happy to put forward because we think they have all of the things that should provide people with the confidence and comfort they need to enable to re-engage in this space," Abraham said.
